You can create a will by yourself, but if you want to ensure that it is legally flawless, you can take assistance from an estate planner or a legal advisor.
Many adults procrastinate when it comes to creating a will, as it acknowledges one’s own mortality. However, it’s essential that you put down your wishes on paper to avoid hassling your heirs. A will is after all a legal tool that helps in disposition of assets among the loved ones as per the desire of the individual after his/her demise. Following are a few things you must consider for creating a will:
Segregating Your Assets:
You must start with segregating all assets that belong to you. The assets should be listed clearly & classified into categories such as immovable properties, movable properties, cash, jewellery, investments, etc. However, if the property is not owned by the testator (the person making the will), it cannot be transferred through a will. Assets which are taken on rent or lease can be passed on to the claimants for the remaining tenure only.
Eligibility:
Anyone who has attained the age of 21 years is eligible to create his/her will.
Appointing A Guardian:
You can pass your assets to a minor but you must also appoint a guardian to maintain the assets until the minor becomes an adult. A will can be changed & revised from time to time. However, the changes need to be properly signed & dated. While for minor changes, you can make a supplementary statement, for major ones, creating a new will is recommended.
Executor of Will:
An executor is someone who executes the wishes mentioned in the will. The executor of a will is an important person and you must select someone you trust. Once the executor is finalized, you must inform him about the appointment & if he agrees upon it, he is nominated as the executor. If you are not able to find a reliable executor, you can take help form the court to nominate one. Typically, two witnesses are required to prove the authenticity of the will; they need to put in their names, addresses & date of creating the will. They or their spouses cannot be the beneficiaries of the will. A medical certificate stating that you are mentally fit needs to be attached to the will and mentioned in the annexures. You can get it form a doctor with the date and time mentioned on it.
Registering the Will
While it’s good to get a will registered, it is not compulsory. A will is considered valid even if it is not registered. However, registration helps you in creating a legal evidence of the will. So, in case you lose your will or it is tampered, you can get a copy of it from the registry office. If you create two wills, the new one would supersede the old one. Your assets will keep growing through the years, therefore you must keep updating your will periodically to reflect the new assets you have acquired.
Can You Create a Will Yourself?
You can create a will by yourself, but if you want to ensure that your papers are legally flawless, you can take assistance from a professional such as an estate planner or legal advisor.
Source: Financial Express
Many adults procrastinate when it comes to creating a will, as it acknowledges one’s own mortality. However, it’s essential that you put down your wishes on paper to avoid hassling your heirs. A will is after all a legal tool that helps in disposition of assets among the loved ones as per the desire of the individual after his/her demise. Following are a few things you must consider for creating a will:
Segregating Your Assets:
You must start with segregating all assets that belong to you. The assets should be listed clearly & classified into categories such as immovable properties, movable properties, cash, jewellery, investments, etc. However, if the property is not owned by the testator (the person making the will), it cannot be transferred through a will. Assets which are taken on rent or lease can be passed on to the claimants for the remaining tenure only.
Eligibility:
Anyone who has attained the age of 21 years is eligible to create his/her will.
Appointing A Guardian:
You can pass your assets to a minor but you must also appoint a guardian to maintain the assets until the minor becomes an adult. A will can be changed & revised from time to time. However, the changes need to be properly signed & dated. While for minor changes, you can make a supplementary statement, for major ones, creating a new will is recommended.
Executor of Will:
An executor is someone who executes the wishes mentioned in the will. The executor of a will is an important person and you must select someone you trust. Once the executor is finalized, you must inform him about the appointment & if he agrees upon it, he is nominated as the executor. If you are not able to find a reliable executor, you can take help form the court to nominate one. Typically, two witnesses are required to prove the authenticity of the will; they need to put in their names, addresses & date of creating the will. They or their spouses cannot be the beneficiaries of the will. A medical certificate stating that you are mentally fit needs to be attached to the will and mentioned in the annexures. You can get it form a doctor with the date and time mentioned on it.
Registering the Will
While it’s good to get a will registered, it is not compulsory. A will is considered valid even if it is not registered. However, registration helps you in creating a legal evidence of the will. So, in case you lose your will or it is tampered, you can get a copy of it from the registry office. If you create two wills, the new one would supersede the old one. Your assets will keep growing through the years, therefore you must keep updating your will periodically to reflect the new assets you have acquired.
Can You Create a Will Yourself?
You can create a will by yourself, but if you want to ensure that your papers are legally flawless, you can take assistance from a professional such as an estate planner or legal advisor.
Source: Financial Express
Instead of randomly investing in a number of mutual fund schemes, investment advisors suggest you select funds, keeping your goals in mind
1. What is goal-based financial investing?
Every individual has several life goals -both long term and short term. Investing in a planned manner to achieve these goals is called goal-based invest ing. For example, if you want to plan a foreign holiday with your family in mid-2018, which is about 18 months away, it is a short-term goal. On the other hand, saving for the higher education of your child who is five now is a long-term goal.
2. How does one plan for goals?
The first step is identifying the goal for which you wish to invest and assessing the time you have to reach it. Once that is done, it is important to find how much the goal costs today. Add a reasonable amount of inflation to that, and then you would know what the goal would cost you in the year you wish to accomplish it. The next step would be to understand how much you can save or invest for that goal. You could then use the systematic investment plan (SIP) or go for a lumpsum investment, or even a combination of both, to achieve that goal.
3. How can you use mutual funds to meet the goals?
First, identify funds based on your risk profile. For example, if you plan for a foreign holiday 18 months from now, which will cost you about Rs. 5 lakh, debt funds (ultra-short-term or dynamic bond funds) will be ideal to reach that goal. Since it is a near-term goal and the time is less than three years, investment advisors suggest you should go for a combination of debt-oriented funds, which could give you anything between 7% and 9%. Do your math and decide whether you wish to opt for a lump-sum investment or want to stagger it. Also keep the tax implications in mind, as debt investments for less than three years will attract short-term capital gains tax. Similarly, for your child's higher education, which would be more than 10 years away, you could invest in equity mutual funds. If you do an SIP of Rs. 5,000 every month for 15 years, at a 12% return you could accumulate Rs.23.79 lakh.
4. What are the benefits of goal based investing?
Goal-based financial planning helps you invest in a systematic and disciplined manner to achieve your goals. It helps you remain focused and unaffected by the short-term volatility in the equity markets.
Source: ET
1. What is goal-based financial investing?
Every individual has several life goals -both long term and short term. Investing in a planned manner to achieve these goals is called goal-based invest ing. For example, if you want to plan a foreign holiday with your family in mid-2018, which is about 18 months away, it is a short-term goal. On the other hand, saving for the higher education of your child who is five now is a long-term goal.
2. How does one plan for goals?
The first step is identifying the goal for which you wish to invest and assessing the time you have to reach it. Once that is done, it is important to find how much the goal costs today. Add a reasonable amount of inflation to that, and then you would know what the goal would cost you in the year you wish to accomplish it. The next step would be to understand how much you can save or invest for that goal. You could then use the systematic investment plan (SIP) or go for a lumpsum investment, or even a combination of both, to achieve that goal.
3. How can you use mutual funds to meet the goals?
First, identify funds based on your risk profile. For example, if you plan for a foreign holiday 18 months from now, which will cost you about Rs. 5 lakh, debt funds (ultra-short-term or dynamic bond funds) will be ideal to reach that goal. Since it is a near-term goal and the time is less than three years, investment advisors suggest you should go for a combination of debt-oriented funds, which could give you anything between 7% and 9%. Do your math and decide whether you wish to opt for a lump-sum investment or want to stagger it. Also keep the tax implications in mind, as debt investments for less than three years will attract short-term capital gains tax. Similarly, for your child's higher education, which would be more than 10 years away, you could invest in equity mutual funds. If you do an SIP of Rs. 5,000 every month for 15 years, at a 12% return you could accumulate Rs.23.79 lakh.
4. What are the benefits of goal based investing?
Goal-based financial planning helps you invest in a systematic and disciplined manner to achieve your goals. It helps you remain focused and unaffected by the short-term volatility in the equity markets.
Source: ET
By most measures, Equity-Linked Savings Schemes are better tax-saving choice
Compared to other allowable investments, ELSS funds are uniquely advantageous. There are two reasons for this. One is that ELSS funds are unique in being the only viable tax-saving investment within this Rs.1.5 lakh limit that brings the benefits of equity returns. Sure, there are two other options that give equity-linked returns- ULIPs and the National Pension System (NPS).
The NPS is a retirement solution rather than a savings one. For one, it has only partial exposure to equity, and secondly, it has a very long lock-in period that effectively extends till retirement age. There's no way a three-year lock-in product like the ELSS can be compared to the NPS. As it exists, returns from the NPS are taxable.
ELSS funds actually have the best combination of much lower cost than ULIPs, 100 per cent equity as well as a reasonable lock-in period of just three years. Beyond this, ELSS funds have another hidden benefit. For many beginner investors, it makes an excellent gateway product in which they get the first taste of equity investing and of mutual funds. You end up investing in these funds because the tax-savings attracts you and it has the shortest lock-in. This experience encourages investors to invest in equity mutual funds over and above their tax-saving needs. Once you have a taste of long-term equity returns, then you end up trying other types of equity investments as well.
For the best way to choose ELSS funds, one should plan ahead and not wake up to tax-saving investments late in the year. For a variety of reasons, savers tend to make hasty and poor decisions while choosing their tax-saving investments.
For one, many of those who wait till the end of the year are those who don't make any discretionary investments other than the tax-savings. They're inexperienced in this whole activity and make a foray into investing only once a year, generally to fall prey to the first salesman who comes along. As long as an investment saves tax, they feel that the immediate job is done.
This approach proves expensive in the long run. A good tax-saving investment must be an investment first and a tax-saver later. For most people, the investment that should make most sense is in an ELSS fund. This is because salary-earners generally have some of the permitted amount going into fixed income through PF deductions and to balance that, equity is advisable. There's a widespread misconception that equity is too risky for older investors or for retirees and therefore they should not use ELSS. Nothing could be further from the truth. Everyone who has taxable income should invest in ELSS to save taxes.
Of course, like all equity investments, the best way of investing in ELSS funds is through monthly SIPs throughout the year. That's also the way to avoid any last-minute rush. At the beginning of every year, estimate the amount you have left over from the Rs.1.5 lakh limit after statutory deductions, divide it by 12 and start an SIP.
Source: valueresearchonline.com
Compared to other allowable investments, ELSS funds are uniquely advantageous. There are two reasons for this. One is that ELSS funds are unique in being the only viable tax-saving investment within this Rs.1.5 lakh limit that brings the benefits of equity returns. Sure, there are two other options that give equity-linked returns- ULIPs and the National Pension System (NPS).
The NPS is a retirement solution rather than a savings one. For one, it has only partial exposure to equity, and secondly, it has a very long lock-in period that effectively extends till retirement age. There's no way a three-year lock-in product like the ELSS can be compared to the NPS. As it exists, returns from the NPS are taxable.
ELSS funds actually have the best combination of much lower cost than ULIPs, 100 per cent equity as well as a reasonable lock-in period of just three years. Beyond this, ELSS funds have another hidden benefit. For many beginner investors, it makes an excellent gateway product in which they get the first taste of equity investing and of mutual funds. You end up investing in these funds because the tax-savings attracts you and it has the shortest lock-in. This experience encourages investors to invest in equity mutual funds over and above their tax-saving needs. Once you have a taste of long-term equity returns, then you end up trying other types of equity investments as well.
For the best way to choose ELSS funds, one should plan ahead and not wake up to tax-saving investments late in the year. For a variety of reasons, savers tend to make hasty and poor decisions while choosing their tax-saving investments.
For one, many of those who wait till the end of the year are those who don't make any discretionary investments other than the tax-savings. They're inexperienced in this whole activity and make a foray into investing only once a year, generally to fall prey to the first salesman who comes along. As long as an investment saves tax, they feel that the immediate job is done.
This approach proves expensive in the long run. A good tax-saving investment must be an investment first and a tax-saver later. For most people, the investment that should make most sense is in an ELSS fund. This is because salary-earners generally have some of the permitted amount going into fixed income through PF deductions and to balance that, equity is advisable. There's a widespread misconception that equity is too risky for older investors or for retirees and therefore they should not use ELSS. Nothing could be further from the truth. Everyone who has taxable income should invest in ELSS to save taxes.
Of course, like all equity investments, the best way of investing in ELSS funds is through monthly SIPs throughout the year. That's also the way to avoid any last-minute rush. At the beginning of every year, estimate the amount you have left over from the Rs.1.5 lakh limit after statutory deductions, divide it by 12 and start an SIP.
Source: valueresearchonline.com
The maturity of your monthly SIP should be aligned to the time horizon for your life goal
We typically spend most of our income, and then regret our spending decisions, especially when we need money to achieve our life goals. In this article, we discuss why you should set-up systematic investment plans (SIPs) to strike a balance between your spending & saving decisions. We also show you how to create SIPs to help you achieve your life goals.
Why Set-Up SIPs?
You and I suffer from what behavioral psychologists call “present bias”. This refers to our marked preference to enjoy life today at the expense of suffering the consequences in the future. Why is that so?
An important reason is delayed feedback. If you eat tasty but unhealthy food today, you enjoy the experience momentarily. But what if you eat healthy but not so tasty food instead? You do not reap the benefits till you. Likewise, spending today brings you happiness now. Saving for the future only gives you happiness in the future. Now, current happiness is much better than future happiness. So, spending today feels much better than saving for the future.
It is in this context that SIPs come in handy. One way to overcome the present bias is to set up a mechanical savings process, whereby the bank or the mutual fund transfers a portion of your current income every month to your preferred investment products. That is not all. SIP also helps overcome inertia. How? Given the mechanical process, you do not have to take effort to save each month. This process also significantly reduces regret that comes when you actively take decisions. So, you reduce the confusion in your brain that you experience each time you have to decide between spending & savings.
An important secondary effect of setting up a SIP is that savings is not a residual process, but the first step you take every month. Allow us to explain. If you do not set up a SIP, you will, perhaps, spend your current income first & then save what remains. This makes it difficult for you to achieve your life goal. But if you set up a SIP, the mutual fund or the bank will take out a pre-determined amount of savings from your account. This process helps you moderate your bias towards spending. Remember, your expenditure otherwise typically rises to meet your income.
Source: Business Line
We typically spend most of our income, and then regret our spending decisions, especially when we need money to achieve our life goals. In this article, we discuss why you should set-up systematic investment plans (SIPs) to strike a balance between your spending & saving decisions. We also show you how to create SIPs to help you achieve your life goals.
Why Set-Up SIPs?
You and I suffer from what behavioral psychologists call “present bias”. This refers to our marked preference to enjoy life today at the expense of suffering the consequences in the future. Why is that so?
An important reason is delayed feedback. If you eat tasty but unhealthy food today, you enjoy the experience momentarily. But what if you eat healthy but not so tasty food instead? You do not reap the benefits till you. Likewise, spending today brings you happiness now. Saving for the future only gives you happiness in the future. Now, current happiness is much better than future happiness. So, spending today feels much better than saving for the future.
It is in this context that SIPs come in handy. One way to overcome the present bias is to set up a mechanical savings process, whereby the bank or the mutual fund transfers a portion of your current income every month to your preferred investment products. That is not all. SIP also helps overcome inertia. How? Given the mechanical process, you do not have to take effort to save each month. This process also significantly reduces regret that comes when you actively take decisions. So, you reduce the confusion in your brain that you experience each time you have to decide between spending & savings.
An important secondary effect of setting up a SIP is that savings is not a residual process, but the first step you take every month. Allow us to explain. If you do not set up a SIP, you will, perhaps, spend your current income first & then save what remains. This makes it difficult for you to achieve your life goal. But if you set up a SIP, the mutual fund or the bank will take out a pre-determined amount of savings from your account. This process helps you moderate your bias towards spending. Remember, your expenditure otherwise typically rises to meet your income.
Source: Business Line