An estate plan also gives you peace of mind since your children will be taken care of in the manner you specify.
If you have a minor child, it’s important to nominate a guardian in your estate plan; otherwise, if both you and your spouse pass away, the courts will decide who takes custody of your children.
The matter goes to court, and no one can access your assets during this period. Everything is put on hold until the court reviews your estate, applies state laws, settles any debts, and distributes your assets.
This process can take months or even years to complete. Additionally, legal fees and other related expenses can be quite high.
Reduce Taxes: India does not have an inheritance tax, but other tax implications, such as capital gains tax, gift tax, and income tax can affect the value of assets transferred to beneficiaries.
Gift Tax - In India, gifts received above a certain value are subject to taxation under the Income Tax Act. However, there are exceptions for gifts received from specified relatives or on certain occasions.
Capital Gains Tax - It may apply when assets are transferred or sold as part of estate planning. This tax is levied on the profit made from the sale of capital assets, such as real estate or stocks.
Understanding these rules and proper planning can help minimise tax liabilities.
Avoid Family Disputes: An estate plan can help prevent disagreements among family members by clearly outlining your wishes and addressing difficult financial decisions in advance. For example, you can create specific arrangements for a child with health challenges or allocate more assets to the child who cared for you the most as you aged.
