Responsible Doctors, do write their WILL

Importance of Will writing for Doctors

Every time someone finds out I am a financial planner as well as offering estate planning services, the first question he asks me is what projects should he invest in?

They relate Estate Planning services to Real Estate Planning. Undoubtedly, we Punjabis are very obsessed with Real estate. 

Due to this mindset and the low level of financial literacy among people (especially when it comes to estate planning aspects) both the price of homes and the number of property disputes have increased unnecessarily not just in Punjab but throughout our country. (Also Read: Why Real Estate is Riskier than Equity for doctors?)

Estate planning does not involve buying or selling real estate but rather distributing the wealth you’ve accumulated over the years among the people and entities of your choice, whether they are stocks, mutual funds, gold, business equity, or real estate. (Also Read: All You wanted to know about types of Mutual Funds)

Besides real estate, there are several other investments that result in family disputes after death, such as gold holdings, equity in businesses, and sometimes your financial assets like mutual funds, shares, debentures, or even your loans or personal assets like cars, paintings, pets, etc.

However, it is not always about avoiding disputes but managing the asset distribution between family members. To do this properly and to the comfort of all family members necessary arrangements are to be made.

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Estate planning involves protecting, managing, and distributing wealth efficiently and in the way you want. It contains three elements – a WILL, Trust, and Power of Attorney.

Doctors are busy professionals and yes, with no Financial Background what you learn is from your experiences. But Estate management is a sensitive issue, and can’t be left to experience. So, it is wise to learn otherwise and make arrangements for the family in your Lifetime.

This is the first article in the series of articles about writing effective and tax-efficient WILLs. 

What is a WILL & the Importance of Will writing

It is a legal declaration of the intent of a testator (person who has written a will) and what he/she wishes to happen with respect to his or her possessions after death.

Wills are statements made by you for your family to show that you genuinely care.

Having a properly written will allows you to make appropriate provisions for your family members, friends, and other important individuals from your investments and insurance proceeds.

You can also give instructions and impose conditions on the use of funds by your relatives to ensure that they are used properly.  Having a WILL allows you to reward your friends and well-wishers (such as your servant, your driver, etc.) by allocating a portion of your assets to them.

In preparing a WILL, you can provide for your not-so-lucky child or relative who isn’t very well off, whom you like very much when you are gone. You will certainly be able to distribute your assets according to your wishes with your Will. 

Doctors are expected to generate good wealth over a period of time, and due to the noise around many times, they do not follow the structured approach of Financial planning and tend to accumulate lots of real estate. Sometimes the Financial assets are so scattered that even they don’t have any control over them. So Will writing is something inevitable for Doctors.

If still you are not encouraged or convinced to write your WILL then here are some disadvantages of not writing it.

If you don’t have a WILL in place, your assets will be divided among your legal heirs according to lay law, such as Hindu succession law for Hindus and Mohammedan law for Muslims, etc. and assets may be distributed among people you would never have chosen. 

Depending on the circumstances, the court may appoint your rich, but irresponsible relative as a guardian for your minor or disabled child. 

Your House will be transferred to your spouse, mother, and children, in equal proportion, and who knows it needs to be sold down to satisfy the monetary demands of co-owners and your wife may have to look out for some other place to live in ( just an extreme thought, but very much possible).

Your wife may be advised to buy ULIPs with the proceeds of your life insurance policy (which you have ignored for years). She may be mis-sold a risky structured product by the banker who has the insurance proceeds if she does not have clear guidelines for using the funds.

What if no one among your family members will be ready to clear off the loan taken by you? (Also Read: How Doctors should plan before taking loans)

Your family may have to go through unnecessary hardship, spend money and energy to claim the things that could have been comfortably transferred to them had a Will been written.

(Also Read: 5 Risks that Doctors are exposed to and how to manage them?)

Importance of writing a WILL- Common Misconceptions 

Being a doctor, you see health issues around you and know that Death is a reality, so you might already be aware of the importance of making a will, and have thought about such things for some time. Despite this, you are unable to make this thought into reality due to doubts about will writing. 

Some of those misconceptions are as below:

Misconception 1 – You need to have a good amount of assets to make a will

It is true that WILL writing does require assets, but the quantity has nothing to do with it. You should also write a WILL if you don’t have any assets but only liabilities.

Everyone has some kind of investment in their portfolio that was bought for the future security of the family. Now, it is your responsibility to make certain that the funds are used appropriately even if you are not there.

Even the proceeds from your insurance policy need to be used properly. If you cannot guarantee that the investment will be used appropriately even in the absence of your supervision, you should not make it at all in the first place.

Do not forget that you did not invest to help your banker or friend reach his or her career goal. You have invested to achieve your Life goal.

Misconception 2 – Once written, a WILL cannot be changed or altered

The will which is not revocable is VOID from the start. A Will can be changed as many times as you desire. 

It is only necessary to refer to your previous WILL with the proper date and mention that your current WILL replaces it, removing confusion is advisable.

Make sure you write your new will as if it were the first time. 

Misconception 3 – It should be compulsory for WILLs to be registered

It is purely a matter of choice. The registration of a WILL is not mandatory. A WILL cannot be challenged because it is not registered, nor can it be deemed valid by the courts if it is registered. Nevertheless, it is desirable to register the WILL.

Misconception 4 – There is no need for a will if you have proper nominations in place

Nominees are only trustees of investment holdings, and they are not legal owners. To make them legal owners, you must mention their names in the WILL along with the investments you have made for them.

Misconception 5Writing a will requires the services of a lawyer, which is expensive

Again, this is not necessary. Even stamp paper is not necessary for the writing of a will. In any language you know, you can write it in your own handwriting on a simple plain page.

Professional help is definitely beneficial in drafting your will, but you can also draft your own will by understanding basic nuances. The risk of having a poorly drafted WILL is much greater than not having one at all.

Doing Self-medication is not advisable. This is what even Doctors Say.

Conclusion:

By Now, you must have agreed with me and understood the importance of writing a will for doctors. Generating wealth is important, but preserving and distributing it properly among family members is equally important.

Doctors are busy professionals and either get easily misled by product sellers or themselves divert from the path of wellness and put their complete focus on earning money only. But managing money has its own importance. Will writing is an important aspect of any Financial Planning exercise. 

Once you have accumulated some assets, and have a family to take care of. Also, when you have crossed a specific age ..say 40 years…you should consider Writing a WILL. 

Do share your thoughts and queries in the comments section below. Also, I would like to know your experiences and learnings too.

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Manikaran Singal is the Founder and Chief Financial Planner at Dr Good Money. Manikaran is MBA Finance (Gold medalist), Certified Financial Planner and SEBI Registered Investment Adviser. Having 17+ years of extensive experience, he is managing clients across the globe. He has authored a book titled - "The Art of Being Good with Money" published by CNBC TV 18, India's Biggest Media House. He is a Regular Contributor in leading Media Houses and his articles keep getting published in different prominent business magazines and Journals. He is of the strong Opinion that Money Behaves the Way you treat it. and if you really want to get Good out of it, first you have to behave good with it.

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