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.