Inheritance Planning: Why you should go for it

Why you should go for inheritance planning

rajat dutta inheritance needs planning

When a 40-year-old man died in his sleep at night, his wife, a professional in a high-pressure job, was overseas. She rushed back, but suffered trauma from the news and had to be institutionalised. The couple’s 12-year-old daughter was unable to access funds in the bank accounts being a minor. It was only when Inheritance Needs Services Pvt Ltd (INSPL) stepped in that the child could get the money legitimately after undergoing a structured process, not known to many.

Wills, nominations and succession certificates enable people to claim assets post the demise of their loved ones. But the transfer process is not simple.

In fact, it can be challenging, providing additional stress to the grieving family. Inheritance planning can save a lot of trouble at such times. This is truer today than ever before as people of all age groups are succumbing to COVID-19, which has altered lives forever.

INSPL provides inheritance-related services that individuals can avail, making inheritance a less painful experience amid grief. “The company’s main intent is to make sure that assets travel the path of legacy,” says Rajat Dutta, Founder & Initiator of INSPL. The company also offers service for the bereaved family to retrieve assets and wealth owned and possessed by the deceased asset owner.  

Based out of Mumbai, INSPL operates in 84 cities through its feet-on-the-field presence. 

“We are uniquely positioned to offer all services to clients under one roof and also have NRIs and overseas Indians as clients,” Dutta adds.  

Apart from individuals, corporates like Mahindra & Mahindra and Tata Sons have also availed the services of INSPL for their retirees and employees. HDFC Pension, through its Life 99 portal, offers INSPL as a value-add service proposition.

The need for inheritance planning services

Dutta offers a lucid explanation for the need to plan inheritance and will. In case an insured person dies, the insurance company pays the beneficiary the sum assured. However, insurance as an asset class constitutes only 8 to 12 percent of an individual’s asset portfolio on average.

The family doesn’t know how to deal with the balance 82 percent, which is spread across asset classes like real estate and diverse financial assets etc. Resolving such challenges and situations is where INSPL has core competence. 

Dutta says INSPL’s services are akin to a pathology lab report. Individuals routinely get their blood samples evaluated, enabling the physician to diagnose the ailment and decide the line of treatment.  

Similarly, when an individual approaches INSPL with the documents of the asset portfolio like financial assets (bank accounts, fixed deposits, lockers, demat accounts), insurance policies, mutual funds, corporate FDs, share certificates or immovable assets etc., INSPL decides the course of action.

INSPL runs a simulation exercise post verification of the submitted documents to arrive at the interim Asset Status Report (ASR). The process factors simultaneous and sudden demise of both the individual and the spouse as a worst-case scenario.

The ASR, like the pathological report, positions the assets individually in respective risk categories reflecting their relative rankings — high risk, moderate risk or low risk – with respect to their propensity to pass on in favour of the beneficiary.

This provides the base for the individual’s advisers – CAs, wealth managers, lawyers to guide him or her on de-risking the asset portfolio when alive.

INSPL charges a fixed flat fee immune to value of assets or net worth for both its services. 

Importance of documentation in inheritance planning

While individuals believe that a joint account with spouse and a nominee is adequate comfort, they are ill informed about the fact that ‘nominee’ has varied connotations and changes with each asset class, Dutta points out.

With laws and statutes getting stringent by the day, ensuring that documentation is in prime order is extremely important. Interestingly, majority of civil suits pending are on land matters due to inadequate documentation, thereby derailing the process of succession and legacy. “That’s not what the owner built the asset for,” he says.

But how amenable are Indians to thinking about their death?

“It’s true that nobody wants to think of death, leave aside planning for the same. However, the market is gradually getting mature.”

People have been exposed to the struggle of families in reclaiming the assets post demise of the asset owner; this is driving a change in mindset, Dutta adds.

INSPL has testimonials from diverse customers indicating that prevention is better than cure. Sushma Sathe, wife of Late Capt Deepak Sathe, who died in the Kozhikode air crash in August 2020 says: “One should opt for their services before the calamity strikes, as this is one basic need which gets ignored in our daily lives though each of us know that we will have to face it, sooner or later.”

(Mandar M Bakre is a Pune-based freelancer with more than 15 years in journalism and communication, primarily in the business domain.)

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