What is the Role of Probate in Estate Planning

blog, Estate Planning

We’re going to touch the topic of probate, what it is and what is its importance, but first you should know a bit about Wills.
A Will is a legal document by which a person, the testator, expresses his/her wishes as to how his/her property is to be distributed at the time of their death. Will is one of the simplest instruments used to transmit assets from one generation to another. Any person of the age of majority can write a Will. A Will can be written on a simple piece of paper and can be written (drafted) by anyone (he need not be a lawyer).
Essential components of a Will:
1. Name of the author of the Will (also called Testator of the Will)
2. Date and place where the Will is being written
3. Two witnesses
4. Testator & witnesses together sign the Will
5. Details of the assets which one person wants to distribute after his death
6. Name of the beneficiaries (people who will get the assets)
7. Details of which beneficiary will get which asset
8. Name of a person (s) who will be the executor of the Will
9. Person who is writing the Will should be of majority age and should be of sound mind
One can change one’s Will as many times as one wants but to avoid disputes or confusion it is important that one restricts the change of Will too often. In case of multiple Wills the Last valid Will become final Will.

A Probate is a process where on death of a Testator the executor approaches the court and obtains an administrative order for distribution of assets to the beneficiary as per the Will. Probate of the Will is compulsory only for people living in the High Court jurisdiction of Chennai, Mumbai or Kolkata or if you have an immovable property in the above mentioned jurisdiction. For people in all other jurisdictions Probate is not compulsory.
In case of dispute between the legal heirs or if the person dies intestate again obtaining Probate becomes necessary. In some cases, especially for transfer of real estate, the officials might insist on getting a probate. For NRIs it might be necessary for repatriation of the money or because of the rule in their country of residence or if a foreign citizen is inheriting these assets their country of citizenship requires them to obtain a Probate.

The cost of obtaining Probate:
In India very state follows different rules and the cost is also different in different states. For e.g the cost of Probate varies from 4% in Delhi to 8.75% in U.P to a fixed fees in other jurisdiction. It is very important to plan one’s estate otherwise the beneficiary may end of paying high amount of Probate fees coupled with delays in obtaining it. Moreover, the time taken to obtain a Probate varies form one state to another. In Some places one can obtain the Probate in six months while in others it may take a considerably longer time.