Power of Attorney is a formal arrangement by which one person appoints another person to act on his behalf and in his name. This authority is given as a person incapable to take decisions on financial matters. It is an instrument in writing whereby one person, as principal, appoints another as his agent and confers authority to perform certain specified acts or kinds of act on behalf of the principal.

The parties in a power of attorney are principal or grantor – the person granting the power; and an agent or attorney – the person taking the responsibilities. It is also termed as an important document in estate planning. Thus, the agent gets the rights to execute contracts, deeds, cheques, mortgages, drafts, money orders, bonds, sale of securities, or shares of stocks. They also have the right to sign on documents such as insurance forms, tax returns, property documents and can accept the rent received.

The Power of Attorney does not mean that the agent owns any of principal’s property. It allows the agent to make financial decisions when the principal cannot. The principal can withdraw a Power of Attorney whenever he wants as long as the principal is competent. Appointing someone as an agent does not mean that the principal gives up the right to manage his own affairs. Even if you own the financial affairs, in case of paying off your debts, you cannot use wealth as your assets to cover the outstanding debts.

A trust is created is where the ownership of the assets is transferred from the owner to the trust. In simple words, it owns the cash, stocks, bonds, life insurance, or real estate of the testator. Trust handles the wealth of the owner while he is alive as well as after his death. The biggest advantage is that any property transferred to the Trust during your lifetime will pass directly to the beneficiaries; it does not need to go through a Probate court. It is a good way to take care of your minor children and helps in assisting your elderly parents.

Author of the trust - the one who sets up a trust, they are also termed as trustor, trust makers, grantor, transferor, creator, or donor.

Trustee – the one who owns the assets and is responsible for handling the assets.

Beneficiary – the one to receive the benefits of the assets, mentioned in the trust.

It is a judicial process that divides co-owned real estate among its owners. In simple words, the court decides how to divide the property amongst the joint tenants, tenants in common or coparceners.

Transferring ownership of the property in the others name, under the guidance of the municipal record. A mutation is done to keep a revenue record for the government. Here, when the property is muted the right owner of the property will be entitled to pay off the property taxes.

It is a voluntary transfer of assets from one person to the other without compensation or any consideration. In the case of a gift deed, the assets are transferred immediately. The person giving is said to be a donor and the one receiving is said to be done. The gift could be any movable (cash, investments, vehicle, etc.) or immovable (land) property. If the donor wishes to change his mind and wants to claim ownership in the property, the gift deed cannot be revoked.

Joint ownership is that legacy plan where on the death of the owner, the property is transferred to the surviving owner. Here, assets such as property, bank accounts, and investments can be owned jointly. In situations to the joint owner not able to pay off the bills, the family members, i.e. spouse or parents and children will take care of their finances. This is most likely used to reduce or avoid estate complications such as probate fees or estate administration. If something goes wrong, the deceased joint owner cannot own the joint property and does not become a part of the deceased joint owner’s personal estate. That means the joint property will not be distributed as per the deceased person's Will.

During a legacy plan, the most important requirement is to register a nominee for your property, investments, and bank-related matters. A minor can be registered as a nominee but can claim the value after turning 18. The nomination is just a way to claim the value owned by the deceased member. It is essential to keep a nominee or beneficiary registered or register during financial goals while you are alive, to avoid unnecessary trouble to your family.

Succession means the person next after the predecessor or after the person who dies. That means if the father dies, his wealth will proceed to his wife or/ and children accordingly. If there is a Will made the document will state, the exact proportion to be distributed according to the deceased member's wish. Most individuals assume that succession planning is an option but it is a necessity.

What do you mean by Intestate?

When a will is not created, the distribution of the wealth of the deceased member goes according to the probate. It is also called as intestate and the proceedings happen, based on the set Acts. These Acts are different for few religions and the family will have to go according to those rules.

Indian Succession Act, 1925

This Act is divided into two categories, namely testamentary succession (written Will) and intestate succession (No Will). The law does not apply to a Hindu, Muhammadan, Buddhist, Sikh, or Jain.

Christian Succession Act

The Christians follow the Indian succession act, which is applicable in both testamentary and intestate succession. Indian Christians native of India come under this Act and for property matters. Domicile certificate of the dead individual is important.

Hindu Succession Act

The Indian Succession Acts, law related to testamentary succession is applicable for the Hindus. For the purpose when the Will is not drafted, they go according to the Hindu Succession Act, 1956. One of the most important features of Hindu Law is the Hindu Undivided Family (HUF) while considering the intestate succession. This Act applies to the whole of India except the State of Jammu and Kashmir.

Succession for Muslims

The Indian Succession Act does not apply for both testamentary succession and intestate succession because they follow the Quran. Hedaya or Fatawa Alamgiri is the authority that handles the subject of Wills for Muslims.

The following payment has to be made if the deceased member is a Muslim

Succession for Jains

As per drafted Will, the Jain law goes according to the Indian Succession Act, whereas, in not drafting a Will the law goes according to Hindu Succession.

Succession for Buddhist

Buddhist law states that the owner with Will drafted come under the Indian Succession Act, whereas, it goes for Hindu Succession if the Will is not drafted.

Succession for Sikh

The Sikh follows the Jain and Buddhist law when it comes to Succession.

A probate is a copy of a Will certified under the seal of a court of competent jurisdiction with a grant of administration of your estate to the executors and is essentially a decree declaring the correctness and legality of your Will. It establishes the right of the beneficiary to the asset being inherited.

The court and executor pay off debts, file tax returns, and notify potential heirs during a probate. The process will last for months and generates legal and administrative expenses that erode your estate. Probate can be controlled and avoided by having a beneficiary in place and also use a trust which distributes the assets among the members. The trust will then ensure your loved ones get their inheritance faster and avoiding unnecessary fees.

A Legacy planning done in advance keeps you assured that even after your death, you have kept a managed legacy for your loved ones. You are avoiding unnecessary hurdles and expenses that will be incurred, if there is no legacy plan. Even when you plan for the estate, it is always good to review in years as there could be an addition to your investments and family requirements too.