Scope of planning with the Will
- If assets are bequeathed by way of intestate succession than, it is received by defined legal heirs and not persons / entities of choice.
- Assets can be received by HUFs, Females, Minors etc., if assets are bequeathed under WILL.
With a Trust under a WILL
- One discretionary Family Trust can be created as a part of the WILL.
- A discretionary trust is liable to tax at the maximum marginal rate (presently 30% + Surcharge), but if formed under a WILL is liable to be taxed as a separate person at regular rates. Even deduction U/s 80 C is available.
- The Trust can have income other than business income (interest, dividend capital gains etc.).
- Discretionary Trusts are trusts where beneficiaries and / or shares of beneficiaries are not determined.
- Such Trusts are useful to take care of dependents decisively.
- Trustees can be empowered to distribute the income among the beneficiaries & at a certain stage even dissolve the trust.
- Shares of a company can also be bequeathed to such trust.
