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Webinar PPT Link and QandA PDF report at the end of this blog.
What is the legal status of a codicil, (in the case of intestate deaths)?
A codicil is an appendix to will. A codicil is valid if the Will is valid and no dispute is there. If there is a Will and a codicil, then the intestate situation does not apply.
(How will this scenario change if the property is on both husband and wife?)
Husband will come as Hindu Male, while Wife will come as Hindu female and accordingly Hindu succession act will prevail. If Christian, Indian succession act will prevail. If Muslim, then the Muslim succession law will prevail.
My father's cousin brother who doesn't have a child, not married, wants to give me his properties and other wealth. If he has to give it as a gift, the gift tax is very high. What is the other way to do it?
Can do only by Will. In the case of Will, transmission charges are low. The gift will be expensive since it will attract registration and stamp charges.
What happens to biz ownership?
Business ownership can be planned by Will. But it is always a good practice to have a succession plan in place for business and keep all concerned family members in the loop and also a document in the Will.
If two people had MOU and constructed a building, later if I want to transfer my share also to the other person which is the safer way? if done whether their family can claim later? self-earned money
MOU is not a legal document. It cannot be enforced in a court of law. Property documents in the form of sale deed decide ownership, not MOU.
Since we would have given personal guarantees to banks, can properties transferred to trust be attached?
Properties transferred to trust cannot be attached for personal guarantees provided it is an irrevocable trust. However, if it is a revocable trust then possible to attach. Further, before transfer to trust, if the property was given as collateral to the bank, then you will have to get NOC from the bank before you can transfer.
Is a property received as a git considered as self-acquired?
Yes, considered as self-acquired, once the gift is received and supported by a gift deed.
If the property is held in the name of the wife but the funds have come from the husband, will the inheritance laws come into play, or will it belong to the husband who has funded it?
Complicated and grey area. Such wills will create disputes, Recommended is to keep one's income and assets in the same person's hands. If husband gifts to wife, it will be considered as gift and Wife's Will will prevail or Hindu female rules will prevail in an Intestate situation
Should the property be transferred to the individual inheriting it even while the owner is alive or that process is to take place after the death of the owner?
Transfer of property can be done before death by way of gift or settlement. Transfer after death will come under Will or Succession act in case of Intestate. Transfer as Gift or Settlement will have registration and stamp charges. Transmission after death does not have significant charges comparatively, except transmission charges.
If the nomination is done for financial assets like MF, fixed deposit, shares etc, even then the intestate will apply?
If No Will is in place, the Intestate - Succession Act will prevail, despite having nomination. Also, keep in mind specific nomination rules - for eg Insurance nomination is governed by Insurance act, mutual funds and stocks governed by Securities contract regulation act. FD is governed by the Banking regulation act. But Nomination in Insurance overrides Will.
What's the best way to transfer a property's own earning, to a non-blood relative?
Can give by Will. Then the recipient does not have to pay any tax since it is by way of Will and is considered as a transmission and not a transfer or gift.
Can you please briefly explain the estate planning instruments once again?
My father in law wants to give his property to his daughter (my wife) does she or he needs to pay any kind of tax?
There is no gift tax in India. Since it is a father to daughter, income tax law exempts gifts from father to daughter. So no income tax applicable for the gift. But transfer charges for the gift will be applicable depending on the nature of the asset.
Is there a gift tax if the property is gifted to a non-blood relative?
Yes, a gift to a non-blood relative is fully taxable in the hands of the recipient under income tax law. So transfer the asset to a non-blood relative by way of Will after the testator's death to avoid income tax act.
Is unregistered will be enforceable? Who needs to store it?
Unregistered Will is enforceable. But no institution accepts unregistered will, since an unregistered will becomes questionable and transfer of assets based on unregistered will becomes difficult. So it is better to register all Will copies. If not registered, then the next best option is to Probate the Will, after Testator's death, to enforce the Will. Probate of a Will is a costlier process compared to Registration of Will.
Can one of the beneficiaries also be an executor?
Yes, a Beneficiary can be an executor but not sign as a Witness. If a Beneficiary signs as a witness, then that results in a conflict of interest
If a property is sold before 2005 by the brothers, can the sisters come back now and claim over the property. The property is the father's self-acquired property?
If there is a Will, then Will will override. If there is no Will, then Sisters can claim a share in the property.
Can a beneficiary also be an executor?
Possible. A beneficiary can be an executor but not a Witness
Should the Executor of the will be an advocate or could any normal person?
Any major person of sound mind can be an executor
Is it mandatory to have an executor?
Not necessary to have an executor. But without an executor, the beneficiaries will have to act as executors by themselves after Testator's death. Without an executor, things might be difficult in case of complex family situations where trust levels are low.
Can the beneficiary be an executor?
Possible. A beneficiary can be an executor but not a Witness.
How much does it cost to register a will? % of the property involved or fixed fee?
Depends on the complexity, time and quality of the person involved.
Can I have an unregistered will written(say some days later) after a registered will execution?
Possible. But it is always better to register all Wills.
Does a will beneficiary supersede a nominee in case of FDs or other financial assets?
Will beneficiary always supersedes nominee in the bank and other financial assets. One exception to this is an insurance claim after death
When the property is entrusted to the trust, whether there is stamp duty applicable?
Yes, stamp duty and registration charges are applicable like a normal sale deed.
After my death can beneficiaries ask trustees to change ownership to themselves or third Parties?
Not possible. The trust will be the owner. In the case of a revocable trust, only the author can claim the asset back to himself. If the author dies, he cannot. In the case of Irrevocable trust, change of ownership not possible to anyone. However, if trustees collude and make fraud then it's possible, but then it breaks fiduciary relationship and audit of trust books will show up the fraud.
Can husband and wife transfer their properties to a SINGLE trust and that can benefit them and also children and grandchildren?
What are the risks associated with private Trust? Can the trustees misappropriate?
Trustees can be misappropriated since they have access to assets and bank accounts. But remember at least two trustees will have to sign all documents. One trustee cannot do independently all transactions. Thus there is a control check here. But if 2 trustees collude then it is possible and will result in fraud. So the selection of trustees is important. Further, you can conduct audits every year, so that you are satisfied with trust funds utilisation. The beneficiaries can request an audit report of the trust. If the auditor also colludes then nothing can save the trust and the beneficiary.
In private trusts, the need for probate is avoided in states like West Bengal and others?
Yes, Trusts avoid probate costs
What is the cost of creating a private trust and what level of the asset [in cr] will justify creating a private trust?
Costs of Trust creation depends on the scenario of how much complication and complexity is involved. Depends on the drafting of the trust deed, quality of the lawyer or estate planner, management costs, the value of corpus, purpose of the trust etc
In a joint bank or Demat or investment account, does the joint holding %age automatically become 50% and each holder can bequeath only his 50% portion or 1st holder has full right to bequeath 100%?
Joint holding is just a mode of holding. The question is, to whom does the money belong to. The % of the amount owned by each joint holder can be bequeathed by him in his WILL. For eg the second holder is the owner of the money, then he will bequeath the entire bank balance in his WILL and the first holder has no right to bequeath. You can bequeath only what is owned by you.
Do we have an option to change the trustee?
Yes possible. Trust deeds will provide rules for the same.
If the Testator doesn't want to directly transfer property to beneficiaries but wants to sell the property after the Testator dies and do charity (donations to multiple charity institutions) How can this be done through will? Also how an executor can sell property, does he need Power of Attorney? Same is the question for a bank account, how an executor can distribute the money as per will?
The testator can mention the details of the charitable institution in the WILL and specify that the proceeds from the property sale should go to the Charitable institution in his WILL. The executor can sell the property and give the sale proceeds to charitable institutions. The executor will have to apply to the court and get a Letter of Administration to sell the property on behalf of the deceased testator. Power of Attorney (POA) does not work here, since the Testator who is the principal is no more and therefore POA to the agent is not valid, while the principal is not alive.
Can a trust property be sold in case of any requirement?
Yes possible. Trustees can sell a Trust property for the benefit of the beneficiaries, subject to the conditions provided in the Trust deed.
What if a will is made and will is not registered, some unwanted person gets hold of the will document and if he destroys the will document, what happens then?
Yes, that's a risk. That's precisely why we should register a Will.
Is Nomination of one family member in Insurance Policy considered as he/she the Rightful owner of that money?
Nominee overrides Will in case of Insurance Policy as per Insurance Law.
Can a gift deed be cancelled/ revoked?
Gift deeds are non-revocable in nature. A revocable gift deed is technically not a gift deed at all. Conditional gift deeds are revocable if the condition is not yet satisfied.
What are the typical expenses for these services? One time and recurring.
Depends on the complexity, time and quality of the person involved.
What are the charges when a property is transferred to the trust?
Stamp duty and registration charges are applicable
Can I give my property as a gift to my father without tax or registration expenses?
You can give a property as a gift to your father without tax. Registration expenses and stamp charges will apply even for gifts like a sale.
What do you mean by ‘digital assets’?
Digital assets mean - emails, mobile, various logins like income tax bank login etc, digital wallets etc.
Should a Will be registered?
Not mandatory to register a will, but recommended. Registered will and Probated Will are accepted everywhere. Unregistered will creates complexities for financial institutions and government institutions to transfer assets to the subsequent owner as per will after the Testator's death.
Who all can be the trustee?
Any major person can be a trustee. But recommend that you appoint a trustee, whom you trust well. Trustee plays a crucial role in a Trust and thus their selection is important. They may be a relative or non-relative
If assets are distributed over multiple states in India. where to register the trust and will?
Registration of Will and Trust to be made in the place of your current residence (or) permanent residence.