Why Estate Planning is a must?

Infosys share  price crashed yesterday  due to the resignation of their CEO  Mr. Vishal Sikka, the first non-founder CEO.He cited the interference of  Founder Mr. Narayan Murthy in his domain. But Mr Sikka reiterated his belief in the great potential of Infosys. The founders of Infosys  were known for good corporate governance but face a great challenge on succession planning going ahead.

 Business tycoon Mr Vijay pat Singhania,founder of Raymonds  has been entangled with his son Mr Gautam Singhania  on inheritance of his empire.He has already handed over his empire to his son but he has no money to meet his daily expenses.  It has a message for parents across the country; " Do not be  blinded on your retirement planning and be careful  in transferring your created your wealth to your children".

 

Studies reveal  on an emerging trend  in USA that more than 25% of the parents exclusively mention in their will not to pass on any wealth  to their children after their death.The prominent example is of Face book CEO couple Mr. Mark Zukerberg  and Mrs. Pricillia Zukerberg

 The  Mahabharata  is an  acknowledgment of sibling rivalry and disputes on kingdom and properties.

The way out?

As Financial Planners we deal with Personal Finance and we are of the view that the succession issue should be resolved in one’s life time through estate planning.

What is 'Estate Planning?

Estate planning  serve to manage an individual's assets in the event of his/her incapacitation or death, including the bequest of assets to heir(s)s/nominee(s). It can be done trough nomination and will .

Nomination

It is best for financial assets like FDs, Insurance policies,Shares.Mutual Funds etc.The nominee are entrusted to take possessions of assets but not entrusted the ownership.

Will

Making a will is very simple.It can be executed in a plain paper and registration is not mandatory.But two witnesses to the will is a must.The executor should be named in the will be the testator.You may like to visit http://www.maxsecfp.in/component/k2/item/18-why-and-how-one-should-make-a-will  for further details on making a will.

Prakash Praharaj

Shri Prakash Praharaj has a passion for excellence. He has been awarded two gold medals for securing top positions both in Graduation and Post Graduation in Commerce. He is an MBA with specialization in Finance and marketing. He has been awarded Diploma in Treasury, Investment and Risk Management besides CAIIB from the Indian Institute of Bankers. He is a Certified Financial Planner from the Financial Planning standards Board, India (FPSB), affiliated to FPSB, Denver, USA and Certified Personal Financial Adviser from NISM. He is also a SEBI registered Investment Adviser vide Reg. no. INA 000000045 dated 2nd August 2013.His book "Your Every day guide to Personal Finance and Insurance" has been published by CNBC TV 18 in August 2015.

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