You’ve just finalised a new investment: a plot of land, a portfolio of stocks, or perhaps your first plunge into unlisted shares. There’s a sense of accomplishment, but also a nagging question: does this new asset mean another trip to the lawyer? A disciplined approach to updating your will after every new investment is non-negotiable for a robust estate plan. This blog cuts through the confusion, outlining clear triggers for when to update a will in India and a simple process to ensure it always reflects your true financial picture.
Why an Outdated Will is a Risk to Your Legacy
A will is not a “set-and-forget” document; it’s a dynamic record of your wealth. An outdated will can lead to disputes, unintended beneficiaries receiving your assets, and legal tangles for your heirs. If you acquire significant new assets and fail to update the will, those assets may not be distributed according to your latest wishes. The law provides a framework for distribution, but it will not account for your personal intentions for that new commercial property or demat account holdings (Source: Cleartax). Proactively deciding when to update a will is the cornerstone of effective legacy planning in India.
Key Triggers: When to Update a Will in India
You don’t need to revise your will with every small mutual fund SIP. However, certain life and financial events should prompt an immediate review. Understanding when to update a will is key to maintaining its validity and intent.
After a Major Asset Purchase or Divestment
For updating a will, the most straightforward trigger is any significant change in your asset pool. If you’re wondering, “Do I need to change my will after buying property?” the answer is a definitive yes. A new house, a commercial space, or even the sale of a significant asset are clear signals to amend your will. This act of updating after new investment ensures all major holdings are accounted for.
Changes in Personal Circumstances
Life events like marriage, the birth of a child or grandchild, divorce, or the passing of a beneficiary or executor fundamentally alter your estate planning needs. Your will must evolve to include new family members or adjust bequests in-line with your prevailing familial situation.
Shifts in Financial Goals or Relationships
A change in your relationship with the named beneficiar(y)ies, or a shift in your own financial philosophy, are equally valid reasons for updating the will. If you’ve started a business or made significant new investments in mutual funds or unlisted shares, your will should provide clear instructions for these complex assets.
Read Our Recently Published Blog on Unlisted Shares: Unlisted Shares for NRIs: High-Risk, High-Return Investment Explained
The Regulatory and Temporal Clock
Changes in taxation or succession laws can impact the efficacy of your will. Furthermore, a common question is how often should you update your will? Experts consistently recommend a review “at least every five years, or when a major life event occurs.” But it is recommended you do it even in the absence of a major trigger. This proactive habit ensures it remains aligned with your overall wealth. (Source: Dilzer Consultants).
The Practical Process of Updating Your Will
So, how do you actually go about updating will subsequent to new investments? You have two main options, each with its own place.
Option 1: The Codicil (Making an Addendum)
For minor, specific changes like adding a single new asset or changing an executor, you can create a codicil. This is a supplementary legal document that amends specific parts of your existing will without revoking the entire document. It must be executed with the same formalities as the original will (witnesses, etc.) to be valid (Source: LawWeb).
Option 2: Executing a New Will
For multiple changes, major life events, or a significant portfolio overhaul, creating a new will is often cleaner and safer. The new will should explicitly state that it revokes all previous wills and codicils. As per legal procedure, “A will can be revoked or altered by the testator at any time” (Source: LawWeb), making the creation of a new will a straightforward right of the testator.
How Rurash Financials Adds Value
At Rurash Financials, we simplify the process of keeping your will current. Think of us as your strategic advisor: we help you identify when a major life event or new investment necessitates an update. Our team coordinates with legal experts on your behalf, ensuring your will remains a true and efficient reflection of your way with your wealth. We manage the complexity, so you have the confidence that your legacy is always secure.
Conclusion: Regular Reviews Over Reactive Revisions
You don’t need to update the will after every small investment transaction, but you must not let it become obsolete. The goal is to establish a habit of periodic review, understanding how often you should update your will as part of your financial discipline. By understanding the key triggers and adopting a proactive stance, you transform your will from a static document into a dynamic protector of your legacy.
For guidance on integrating periodic will reviews into your wealth building strategy, speak with the experts at Rurash Financials.
Frequently Asked Questions (FAQs)
1. Do I need to update my will after every new investment?
No, not after every small investment. However, you should update your will after investments that involve significant assets like property or a large portfolio of shares.
2. What happens if I don’t update my will after acquiring new assets?
If you acquire new assets and don’t update your will, those assets may not go to your chosen beneficiaries. Without specific instructions, they could be distributed according to standard inheritance laws, which might not match your intentions.
3. Can I make an addendum (codicil) instead of rewriting my will?
Yes, for minor changes, a codicil is a legal and efficient alternative. For multiple or significant changes, creating a new will is generally recommended.
4. How often should you update your will?
A good practice is to review your will every 3-5 years, or immediately after a major life or financial event.
5. Do I need a lawyer or financial advisor to update my will?
While not legally mandatory for a simple will, using a lawyer ensures the amendment is legally sound. A financial advisor can identify the financial triggers that necessitate an update to your will.
6. Should investments like mutual funds, unlisted shares, or demat accounts be included in a will?
Yes, absolutely. Your will should provide clear instructions on the transfer of all kind of investments you own, in order to avoid confusion for your heirs.
7. What if I forget to include some investments in my will?
Assets not mentioned may be covered by a residuary clause in your will. If no such clause exists, they may be distributed according to the default laws of succession.
8. Is it costly to update or register a new will?
The cost varies based on complexity. However, the cost of not updating it can be far greater in terms of legal disputes and family strife.
9. Can NRIs also update their will for Indian investments?
Yes, NRIs can and should update their Indian wills to reflect any changes in their asset portfolio in India.
10. What is the simplest way to keep my will updated with all my investments?
The simplest way is to maintain a consolidated list of your assets and review it annually. Partner with a reliable advisor who can flag significant portfolio changes.