Page 228 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Unit 12: Estate Planning

Notes

Notes For a power of attorney document to be legally valid under Indian law, it must be
exhaustive in its provisions, properly stamped, executed and attested by a certified notary
advocate. Remember, in a court of law, if there is a dispute pertaining to the scope of the
power of attorney, the interpretation of the court is always strict. Therefore, the legal
document should bestow the responsibilities clearly so that the functions are specific and
comprehensive.

Self Assessment

State True or False:
1. A durable power of attorney allows a person you designate to access and control your
financial assets.
2. Core objective is also to distribute wealth in a pre-determined manner to a certain
beneficiary or beneficiaries to whomever the owner wishes.
3. In the case of a Will, there is no question of probate as the ownership of the assets is passed
on to the trustees.

4. Gift recipients can be only the family members as per Indian Law.
5. An estate is the total of all personal and real property owned by an individual.

12.5.2 Tools used after the Death of an Individual

The following Figure 12.3 shows the tools used for estate planning where the transfer of assets
to the beneficiary becomes effective after the death of an individual.

Figure 12.3: Tools used for Estate Planning after the Death of an Individual

12.6 Risks and Drawbacks involved in Estate Planning

An individual’s goals or wishes on how his assets are to be distributed may not be fulfilled

Huge costs of transfer and taxes
An individual’s family may be in financial distress if the process id not properly planned
There may be insufficient liquidity to meet client’s debts an taxes
Time consuming legal procedures

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