Inheriting assets after death of the owner

[ecis2016.org] Having a will bequeath immovable property to people is of utmost importance. However, here is what you should know about the Hindu Succession Act 1956, in the absence of a will

Efficient succession planning is very important, to ensure that your hard-earned wealth reaches the people you intend to have it. This is more important in the case of immovable property such as flats, apartments and land, as the succession of such assets is a highly complex process, attracting a great amount of paperwork, legal complexities and tax implications. For example, people living in flats, are governed by the cooperative laws of the state which provide for the nomination of the house in case of a death. However, a nomination is not the same as bequeathing a property by will.

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It may be noted that the nomination only provides for the transfer of the name in the records of the housing society but it does not make the nominee a full-fledged owner of the flat. The legal heirs are the beneficial owner of the property and the nominee cannot dispose the asset for his own benefit. The law for succession to a property, depends on whether the deceased person has executed a will or not. Hindus (including Buddhists, Jains and Sikhs) are governed by the Hindu Succession Act, 1956.  The rest of the Indian population comes under the Indian Succession Act, 1925.

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What is a will?

A will is an official documentation of the transfer of property rights form one family member to their successors, generally within the family. Generally, as per the laws the property rights are transferred to the legal heirs of the owner after his death. However, a will is often filed to avoid legal complications or different claims by property members. There are generally two kinds of successions- intestate succession and testamentary succession.

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How to write a will?

You must have a testator, an executor and two witnesses before you write a will. A testator is a person who writes the will on your behalf. An executor is one who is responsible for carrying out your will and the witnesses are the ones required to testify.

After having these required people at your disposal, you must dictate the clauses of your will. One must be clear to mention every terms and conditions, and clauses of the will along with mentioning the names of the heirs wherever necessary. The date of the will is mandatory and is considered to be the date when the will is being written. It is crucial to mention the date on your will as it ensures that the latest bill is executed.

One can amend the clauses of their will whenever they want to. In this case, the original bill has to be amended with the amendment date. The last amended bill is generally considered to be the current one and is executed.

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Succession through a will

Financial planners are unanimous in their opinion about Wills. In order to ensure that the division of the property remains hassle-fee, the owner must prepare a will in his lifetime, in consultation with a lawyer and get it registered.

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People who come under the jurisdiction of the Hindu Succession Act, can bequeath their property to any person, even excluding relatives, through the execution of a will. In such a case, it is mandatory for the executor of the will, to obtain a probate (certification) from a court for assets in Mumbai, Kolkata or Chennai.

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Succession without a will

In case a deceased owner of property does not leave behind a will, the legal heirs will inherit the assets as per the provisions of the Hindu Succession Act, 1956 in the prescribed order. The first preference is given to Class-I legal heirs, which include close relatives like parents, spouse, children and their successors. When it comes to each of their shares, sons and daughters, and parents will have equal shares. A spouse too, will be entitled to one share. However, in case there are more than one surviving spouses, they all will share the one portion they are entitled to. Their successors too, will get only one share, which the person through whom they are claiming was entitled to.

When a house has been left without a will, a female heir is entitled to claim a share and stay in the house. However, only the male heir has a right to divide the property and the female heir cannot call for a partition. Despite leaving a will, it’s still necessary for the legal heirs to obtain a succession certificate from the court.  It’s the legal document that authorises the person or people obtaining it, to represent the deceased individual for the purpose of collecting debts and securities due to him or payable in his name. For obtaining the succession certificate, an application needs to be made to a magistrate or a high court.

It’s fairly evident that a will prevents a lot of problems from occurring and also ensures the efficient passing of property to the right people.

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Paperwork requirements for inheriting assets after death of owner

For proper transfer of property, one needs to apply in the sub-registrar’s office. The applicant will need the ownership documents of the property, that is, the Will with a probate or succession certificate.

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In case of absence of a Will, the legal heirs will be required to submit no objection certificate which will depend on the settlement. If the beneficiaries are paying the other legal heirs to acquire their shares, the same should be mentioned in the transfer papers.

After registration of the property in the name of the beneficiaries, an application has to be made for mutation of the property title. The mutation will reflect the change in ownership of the property in the records of th revenue department. The application for mutation has to be made in the local municipality office. After the mutation has been done, property tax will borne by the new owner of the property.

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If there is a pending home loan on the property, the new owner will be required to pay off the entire loan pending amount and only then the new owner will be able to get the property transferred in his name. The home loan lender keeps the original documents while giving the loan and releases the same only upon full repayment. If the acquired property is let out on rent, the new beneficiaries will be required to execute a new rent deed with the tenant where the new beneficiaries will be considered as the new lessors.

Property transfer is a state subject and hence the fees, documents and applicable fees will differ from state to state. Taking the help of a lawyer is advised if the new beneficiaries are not very well versed with the procedures.

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Rights of Children in inheriting assets after death of owner

As per the succession laws, a son has the right on the property of his father and grandfather only by birth. The son has equal rights like his father on ancestral property. In the case of a person having a separate property or even a self acquired property and such a person dies without making a will then his living mother, sons, sisters, grandmother and brothers have equal rights of succession in such a property.

Rights of Widow in inheriting assets after death of owner

Wife (widow) has a legal right in her husband’s self acquired properties because she is Class I heir. Interestingly, she does not have legal rights on her husband’s ancestral properties.

Rights of Daughters in inheriting assets after death of owner

The proper share in ancestral properties before 2005 was only granted to unmarried daughters. But after 2005, equal rights of a son were given to the daughters also.

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Rights of Adopted Child in inheriting assets after death of owner

Legal rights of inheritance of properties for an adopted child are almost the same as to a natural born child. After adoption, the adopted child has no inheritance rights on the properties belonging to his/her biological family. But if the adopted person acquires properties before the adoption, the properties will remain to be in his/her name.

Right of Child born in live-in relationship in inheriting assets after death of owner

Supreme Court, in the year 2008, in Vidyadhari v/s Sukhrana Bai legal case granted those children who are born in a live-in relationship recognized them as legal heirs and gave them proper inheritance rights. .

(The author is a tax and investment expert, with 35 years’ experience)

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