Estate Planning is creation of a plan to manage individuals wealth when he is alive and distribute when is not alive.
In India, estate planning is perceived mostly for the wealthy people who have created enough assets to leave for their beloved ones. It has got 3 distinct categories Wealth Accumulation, Wealth Preservation and Wealth Distribution.
After accumulating and preserving enough wealth is to distribute wealth among the beloved once. Common or most traditional way of passing wealth Is to execute a Will or create a Living Trust. Other less used options are Personal holding Company, life Insurance, and setting up a foundation is used internationally.
Consider the most efficient and easy way of doing estate planning among the above are Will and Trust
A will is a legal document containing details of how assets should be distributed among the beloved ones in the event of death. Will is again controlled by a Probate but this process is considered to be more cumbersome, lengthy an time consuming. Disadvantage of will is that assets in context are to be made available for public inspection and cannot be utilized until Probate is over.
A Living Trust, is becoming increasingly popular among wealthy people. This is also called as Revocable Living Trust. It can be terminated or revoked at any point of time by the maker himself when he is alive. Living trust do not come under any court supervision, this is substituted by a trustee. Trustee can be spouse, elder child or any relatives who can act in the best interest of the beneficiaries in the event of death. However it is utmost important to choose trustee carefully because in some cases because, trustee may take personal advantage.
Person who is planning for succession has to first structure the proposed successors and their asset holding pattern before documenting as a first step. Secondly understand the succession or trust laws of that country or region for better estate planning.