Report Wire

Tag: Estate planning

  • Is it advisable to draft separate wills for every of my properties?

    As a part of property planning and distribution of my belongings, I wish to perceive the choices accessible for creating separate wills for every property that I personal. Are there any advantages or drawbacks related to this strategy?

    —Name withheld on request

    Though you’ll be able to create a number of wills for a number of belongings, it should create immense confusion between the beneficiaries and the distribution of the belongings. Further, managing a number of wills will be complicated and will require further authorized and administrative effort. If there are contradictory phrases in numerous wills, it might create authorized problems and dispute.

    We will all the time recommend to make one will that covers your total asset base. You can outline every of the properties and belongings owned by you. Further, you too can outline to whom (desired beneficiary/ beneficiaries) every of the properties/ belongings needs to be distributed and during which ratio it needs to be distributed.

    Do guarantee to supply correct description of the property, give particulars of the beneficiaries which can be talked about within the will with some sort of identification, do appoint the executor for the need and have the need witnessed by not less than two witnesses. In case you’re excluding a member of the family who ideally is an inheritor of your belongings then it’s prudent to explain why you’d be excluding him.

    However, do keep in mind to replace your will periodically to replicate modifications in your belongings, beneficiaries, or different circumstances.

    If you’re uncertain about methods to transfer forward along with your will, it’s possible you’ll take into account searching for the recommendation of knowledgeable. A authorized skilled can present steering on the necessities for a sound will and might help you make sure that your will is executed in line with your needs.

    Neha Pathak is head–belief and property planning, Motilal Oswal Private Wealth.

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    Updated: 17 Oct 2023, 08:30 PM IST

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  • Is it potential to promote any property after registering it as present deed?

    If a Hindu donor transfers property through a registered present deed however subsequently sells this property to a 3rd occasion quickly after, which doc will maintain authorized priority?

    —Name withheld on request

    Your question infers that every one the best, title and curiosity of the donor within the involved property has been unconditionally and irrevocably transferred in favour of the donee below the registered present deed. Hence, the title to the property in query has been handed on to the donee; and therefore the donee is now absolutely the proprietor of such property.

    Any subsequent purported switch of the identical property by the donor on this case by advantage of any doc or in any other case, is not going to have an effect on the rights of the donee. In different phrases, the third-party purchaser is not going to get any legitimate title to such property and the rights of such third-party purchaser shall be topic to the rights of the donee.

    I’m exploring the potential of crafting distinct wills for every property in my possession. I’m looking for steerage on the authorized viability of such an strategy. Additionally, I wish to know if creating separate wills for every property is certainly a viable choice.

    —Name withheld on request

    Assuming that every one the property proposed to be bequeathed below testamentary instrument(s) are held in India, just one will is to be ready for all such property. The executors of your should take steps to acquire probate (if that’s the case relevant) of such will in India from the related courtroom, if required; and make sure that the bequests of various property in favour of various legatees below the need takes impact in accordance with the provisions of your will. Multiple wills are extremely more likely to trigger points on their validity and run a danger of being held invalid; and really more likely to trigger confusion. That mentioned, in the event you maintain property in a number of jurisdictions (i.e. outdoors India as effectively), then it’s advisable to make one will for every such jurisdiction the place the property are held as this may guarantee smoother succession of your property in favour of the legatees.

    Do attain out to your legal professional for a deeper dialogue and evaluating the professionals and cons primarily based in your nature of property, variety of legatees, inter-personal relations amongst members of the family, and so on.

    Rishabh Shroff is accomplice and co-head, personal consumer, Cyril Amarchand Mangaldas.

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    Updated: 12 Sep 2023, 10:48 PM IST

  • What it’s best to learn about property planning and the transition of belongings

    Estate planning, in easy phrases, is managing, preserving and distributing of an individual’s movable and immovable belongings (monetary and non-financial belongings) after the individual’s demise to his family members. A superb property plan will be sure that this transition is a clean one and the household’s wants are taken can care of.

    The major function of property planning is to make sure that the household is protected and might proceed to keep up the identical way of life they’re used to after the primary revenue earner’s demise.

    Furthermore, property planning additionally comes into image if the individual has change into incapacitated attributable to any way of life illness. Various way of life ailments corresponding to Parkinson’s illness, dementia, neurological issues, and so forth., can have an effect on regular functioning of a person. To defend and protect the person’s wealth, you will need to effectively make the most of the monetary assets. In such instances, the position of beneficiaries and executors needs to be clearly outlined.

    There are a number of instruments that can be utilized to implement an property plan. Individuals can use one of many instruments or a mixture of them, relying on their objectives.

    Insurance: Taking a complete life insurance coverage cowl is among the best methods to make sure that the family-members are well-covered. In case, the household loses its major supply of revenue as a result of revenue earner’s sudden demise, an insurance coverage cowl can deal with the household’s day-to-day bills and different monetary objectives. Further, the Married Women’s Property Act (MWP Act) can be utilized successfully to guard the property of a married girl, obtained via the insurance coverage cowl. It is a authorized safety given to a married girl’s belongings in opposition to collectors and different family. It secures the married girl’s belongings and assures monetary stability.

    Nomination: You should test whether or not all of your investments—actual property and monetary belongings—has a nominee. At the identical time, the nominee also needs to remember that she or he is a nominee. Often, there are instances the place the nominee is conscious solely after the individual’s demise. Nominations needs to be made throughout belongings— banks financial savings account, present account, fastened deposits, financial institution lockers, put up workplace schemes, bonds, demat holdings, shares, mutual funds, bodily shares (if one is holding), residential or industrial plots, flats, gold, silver, work, artefacts and some other belongings.

    Will: A will or testomony is a crucial software, which is utilized by the testator (who makes the need), to outline the style by which she or he needs the belongings to be distributed after his or her demise. It is a authorized doc and thus, has an necessary position in property planning. A will reveals the essential intention of the testator concerning the individuals she or he needs the belongings distributed to after his or her lifetime. Without a will, the authorized heirs can face loads of issues to assert the belongings, which might run into years. So, a person ought to make a will. If there is no such thing as a will made by the individual, i.e the individual dies intestate, then the authorized heirs might have to receive a succession certificates as per succession legal guidelines to assert the belongings of the deceased individual. Here are some necessary suggestions to bear in mind when making a will. A will must be in writing. It will be even handwritten. It needn’t be on a stamp paper. It ought to have two witnesses. Preferably, the witnesses needs to be youthful than the testator. Registration of a will is optionally available, however advisable if there’s immovable property concerned.

    Gift deed: A present deed will also be used to switch belongings to members of the family and family for movable and immovable property. But that is used for transfers through the individual’s lifetime.

    Trust: A belief is an entity that may be created to safeguard a person’s belongings. It is a separate authorized construction from the person. A belief will be created for beneficiaries, who’re minors, bodily challenged or for charitable functions. A belief will be helpful for avoiding disputes on belongings.

    Tejal Gandhi is a Mumbai-based licensed monetary planner.

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    Updated: 07 Sep 2023, 10:26 PM IST

  • Can any girl lay declare to her son’s belongings with out a will?

    My husband died with out making a will. He owned just a few properties and had some investments as nicely. His mom is now contesting his property regardless that she has belongings of her personal. Is her declare legitimate?

    —Name withheld on request

    We assume that your husband was a Hindu and that there isn’t a proper or curiosity of some other particular person within the property and that these properties had been self-earned.

    As per Hindu Succession Act, 1956 if a male dies intestate, i.e. with out making a will then “common guidelines of succession within the case of males” apply. It states “The property of a male Hindu dying intestate shall devolve according to the provisions of this Chapter—(a) firstly, upon the heirs, being the relatives specified in class I of the Schedule;(b) secondly, if there is no heir of class I, then upon the heirs, being the relatives specified in class II of the Schedule;(c) thirdly, if there is no heir of any of the two classes, then upon the agnates of the deceased; and (d) lastly, if there is no agnate, then upon the cognates of the deceased.”

    The class I authorized heirs (whoever is surviving) consists of mom, partner, kids, widow of predeceased son, and many others.

    In case there isn’t a will, a succession certificates or authorized inheritor certificates is acquired from the competent civil courtroom. This is a doc that provides the suitable to inherit the belongings to the authorized heirs of the deceased who died intestate.

    While your husband’s mom may need her personal belongings, her declare to a share in your late husband’s property might be legitimate beneath the above relevant authorized provisions. Laws and interpretations can differ, so it’s essential to hunt recommendation from a professional authorized skilled to totally perceive your rights and obligations on this scenario.

    Also, one may counsel sitting down with the household to debate and are available to a consensus generally is a sensible and fewer adversarial method. It may also assist to keep away from the bills and emotional toll that authorized proceedings can convey. However, it’s nonetheless advisable to contain authorized professionals, even throughout such discussions, to make sure that everybody’s rights are protected and that any settlement reached is legally legitimate and binding. Consulting with a authorized skilled can present readability on the very best plan of action primarily based in your particular circumstances.

    Neha Pathak is head of belief and property planning, Motilal Oswal Private Wealth.

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    Updated: 05 Sep 2023, 10:17 PM IST

  • NRIs: Here’s what you must know when writing a will

    Rishabh Shroff, co-partner and head-private shopper at Cyril Amarchand Mangaldas, addresses a few of the often requested questions on property planning for NRIs in an interview with Mint. Edited excerpts:

    When testator is a NRI

    Can NRIs put together a will for his or her property in India?

    When people reside abroad, they typically come into possession of two classes of property. First, they could have property situated within the nation they reside in, together with a neighborhood checking account, and properties. Second, they could possess self-acquired or inherited property in India. In such circumstances, it’s advisable to draft two separate wills. One that pertains to their international property outdoors of India and one other that particularly handle their Indian property. These two wills function concurrently. The Indian will should adjust to Indian legal guidelines, each on the time of drafting and in relation to any probate, if relevant.

    Should the NRI be current in India when writing an Indian will?

    Physical presence just isn’t required to draft a will governing Indian property. It will be drafted wherever on the earth and might be legitimate so long as it follows the necessities underneath the Indian Succession Act. The will must be signed by the testator (the person drafting the need) and two witnesses. There is not any different requirement.

    For wills referring to international property, the necessities will fluctuate relying on the nation during which the need is to be executed. For instance, in Singapore, the necessities are kind of the identical as in India.

     

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    Can witnesses be NRIs as properly?

    Yes. But, on the probate stage, the witnesses could have to submit an affidavit to the Indian courtroom that they had been certainly witness to the testator signing the need. Depending on the place the NRI witnesses reside, a letter to that impact from a notary of their residence jurisdiction would additionally suffice.

    Can the might be signed by way of video conferencing with witnesses from India?

    This just isn’t permitted underneath Indian regulation. The regulation requires that the 2 witnesses be bodily current when the need is being signed.

    Is it really useful to have an executor in India?

    Yes, it’s strongly advisable. An executor is a person appointed by the individual drafting a will (known as the testator) to hold out the directions and needs said within the will after their loss of life. Executors have larger duties, requiring bodily visits to the involved courtroom as properly. They could have to fulfil numerous authorized formalities, render accounts, and so on.

    Note that the Indian Succession Act permits a couple of executor to be appointed, and therefore you’ll be able to contemplate having one native executor primarily based in India, and an NRI as properly if required in sure circumstances.

    Does the registration of a will maintain extra significance for NRIs?

    The advantages and disadvantages stay unchanged whatever the individual’s residency. The main benefit of registration is to ascertain the authenticity of the need and the testator’s signature, thereby avoiding any dispute on these particular grounds. If such issues don’t exist, registration will be omitted. It is necessary for NRIs to be bodily current in India for registering a will within the nation. They also can contemplate testifying the need overseas on the native embassy as per a longtime course of.

    Can a will written and registered outdoors India be enforced within the nation?

    Indeed, it’s attainable. This state of affairs is kind of frequent when an NRI has a complete ‘global’ will masking each Indian and international property. If probate or authorized processes are accomplished for such a will within the international nation, it may be utilized to the related Indian courtroom to have it authenticated. The particular process could fluctuate amongst Indian courts, however usually, the Indian courtroom will evaluate the international will and its probate primarily based on its deserves. If deemed acceptable, the courtroom will subject related orders to increase its applicability to Indian property. In nearly all circumstances, that is by no means a problem.

    When authorized inheritor is a NRI

    Are there any restrictions on the forms of properties an NRI can not inherit?

    Put conversely, an NRI can inherit any asset underneath an Indian Will. This consists of property reminiscent of agricultural land.

    What concerns ought to one take note when drafting a will for a authorized inheritor residing overseas?

    The Foreign Exchange Management Act (FEMA) 1999, guidelines can be relevant in such circumstances. The main subject that an NRI will face when planning for inheritance from India can be the trade management limits on the funds that may be remitted outdoors India. Likewise, if agricultural land is concerned and must be bequeathed to an NRI inheritor, or if a testamentary belief (a belief that comes into impact after the loss of life of the testator) is created with NRIs as beneficiaries, they should take correct authorized recommendation.

    Should NRIs who’re authorized heirs go to India on the time of inheritance?

    The key individual through the inheritance course of can be the executor of the need, who’s legally liable for guaranteeing that the switch of property is completed correctly in accordance with the need’s directions. The residency of the authorized inheritor just isn’t related and the NRI heirs will not be strictly required to go to India to get any property transferred to them.

    Depending on the complexities of the property concerned, an NRI can appoint an influence of lawyer in India to deal with the related authorized affairs, for instance – if any a part of the property is underneath dispute.

    Are there any permissions wanted from the Reserve Bank of India by the authorized inheritor?

    No permission is required on the time of writing the need. We typically see issues come up when money must be remitted from India to the NRI dwelling abroad, the place trade management limits are relevant. Likewise, the place Indian trusts are arrange with solely NRI beneficiaries, these fall into a gray space of FEMA and issues come up when abroad distributions are contemplated. NRIs ought to determine in the event that they want to entry such property inside India itself or remit them abroad—if just for use in India, issues are a lot smoother.

    Are there any limitations for an NRI authorized inheritor who needs to promote an inherited property?

    No, it’s common for NRIs to dump inherited properties as they could not need the duty and prices related to managing outdated ancestral properties. However, it’s important for NRIs to make sure that the title switch course of is dealt with rigorously as per regulation. This could contain submitting for probate, if relevant, and guaranteeing that the title paperwork are appropriately mutated of their favour. By doing so, the NRI can set up a transparent and marketable title for the property, which may doubtlessly get a greater sale worth as properly.

    What are the bounds on the repatriation of sale proceeds of inherited property?

    NRIs are permitted to remit as much as $1 million per 12 months as capital, along with a limiteless quantity of present revenue (topic to analysis to substantiate it qualifies as present revenue). If the sale proceeds of the inherited property exceed this restrict, the remittance could should be unfold out over a number of monetary years. While it’s theoretically and legally attainable to use to the RBI for permission to remit a bigger quantity, the possibilities of acquiring such permission are extraordinarily slim.

    The NRI can contemplate leasing the property or reinvest the surplus sale proceeds right into a extra appropriate property for the long run as an alternative.

    What concerning the levy of inheritance tax?

    India doesn’t impose an inheritance tax or property obligation at current, and there aren’t any indications of the present authorities desiring to reintroduce such a tax. However, you will need to notice that many nations do levy an property obligation, sometimes ranging round 40%. The citizenship and residency of the testator and authorized inheritor, and the situation of the properties play a key position in figuring out the tax levy. Therefore, when NRIs have interaction in international property planning, it turns into essential for them to rigorously contemplate the tax effectivity of bequests made underneath their wills (and even lifetime presents). Failure to take action could lead to vital tax legal responsibility for his or her relations. Especially, NRIs with US inexperienced card/passports want to hunt recommendation early of their planning.

    How are domicile and citizenship totally different and the way will this impression the need?

    Domicile will be outlined as having a everlasting residence or place the place an individual resides with the intention of remaining there for an indefinite interval. Citizenship, alternatively, pertains to a person’s formal authorized standing in a specific nation. It is often granted on delivery inside a selected nation’s territory. India doesn’t enable twin citizenship.

    Domicile holds restricted relevance on this period of world mobility. The key space the place domicile performs a task is for UK–India-related succession, the place claiming legitimate Indian domicile standing can save the authorized inheritor from paying 40% inheritance tax within the UK.

    A authorized inheritor holding Indian citizenship has relevance when it comes to sure property that may solely be owned by residents, for instance, shares of corporations in sure delicate sectors, and agricultural land. But these are the minor exceptions.

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    Updated: 23 Jun 2023, 02:26 AM IST

  • How to navigate by intestate succession in absence of Will?

    My dad and mother , along with my partner, have an equal stake in my privately-held agency. My family incorporates my estranged brother who runs a competing manufacturing enterprise. My dad and mother needn’t write a will. What could be the licensed ramifications within the occasion that they die intestate and what steps can I take to safeguard my stake throughout the agency?

    —Name withheld on request

    This is form of a peculiar draw back that is pretty widespread in Hindu households whereby the shares of the family-run enterprise is held by all relations. Since your estranged brother runs a competing enterprise, you will not like him to have a shareholding in your group and intervene throughout the working of enterprise in any methodology. If your brother will get the possession in your group, it’ll create a flowery licensed state of affairs for you and your family members.

    In the event of your dad and mother passing away intestate, their property will doubtless be inherited by every the sons, notably your self and your brother.

    This implies that the 50% shareholding held by your dad and mother will doubtless be inherited by you and your brother to the extent of 25% each, and thus your brother could have vital minority shareholding in your group which is ready to vest diverse rights in his favour exercisable beneath the Indian Companies Act and, in any case, there’ll doubtless be accountability factors.

    It is important that even it is advisable to write a will, as throughout the unfortunate event of one thing happening to you, your property will doubtless be equally divided between your partner, kids and your mother, who is probably going one of many class I licensed heirs beneath the Hindu Succession Act. So, throughout the event of your demise all through her lifetime, positive shares owned by you’d go to her and this will solely compound the difficulty.

    It is subsequently important in your dad and mother to each write a will in your favour for the shares owned and held by them in your group or current these shares to you now all through their lifetime to avoid creating licensed points for you and your family members.

    It is important to know that beneath intestate succession, all the licensed heirs get equal rights and share throughout the property of the deceased, whereas throughout the case of a will, differential rights are created and the property is inherited as per the wants of the deceased as expressed throughout the will and is not distributed equally. Hence, counting on the family circumstances, it is important to place in writing a will.

    Anju Gandhi is affiliate at SNG & Partners, Advocates & Solicitors.

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  • How to navigate via intestate succession in absence of Will?

    My dad and mother , along with my partner, have an equal stake in my privately-held agency. My family accommodates my estranged brother who runs a competing manufacturing enterprise. My dad and mother need not write a will. What can be the licensed ramifications within the occasion that they die intestate and what steps can I take to safeguard my stake inside the agency?

    —Name withheld on request

    This is type of a peculiar draw back that is pretty widespread in Hindu households whereby the shares of the family-run enterprise is held by all relations. Since your estranged brother runs a competing enterprise, you will not like him to have a shareholding in your group and intervene inside the working of enterprise in any technique. If your brother will get the possession in your group, it will create a flowery licensed state of affairs for you and your family members.

    In the event of your dad and mother passing away intestate, their property will probably be inherited by every the sons, significantly your self and your brother.

    This implies that the 50% shareholding held by your dad and mother will probably be inherited by you and your brother to the extent of 25% each, and thus your brother could have vital minority shareholding in your group which is ready to vest diversified rights in his favour exercisable beneath the Indian Companies Act and, in any case, there’ll probably be accountability factors.

    It is crucial that even it is advisable to write a will, as inside the unfortunate event of one thing going down to you, your property will probably be equally divided between your partner, kids and your mother, who is probably going one of many class I licensed heirs beneath the Hindu Succession Act. So, inside the event of your demise all through her lifetime, certain shares owned by you’d go to her and this will solely compound the problem.

    It is subsequently important in your dad and mother to each write a will in your favour for the shares owned and held by them in your group or current these shares to you now all through their lifetime to avoid creating licensed points for you and your family members.

    It is crucial to know that beneath intestate succession, all the licensed heirs get equal rights and share inside the property of the deceased, whereas inside the case of a will, differential rights are created and the property is inherited as per the wants of the deceased as expressed inside the will and is not distributed equally. Hence, counting on the family circumstances, it is important to place in writing a will.

    Anju Gandhi is affiliate at SNG & Partners, Advocates & Solicitors.

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  • What it is advisable learn about inheriting property overseas

    In such instances, the surviving household in India might need to take a number of steps geared toward transferring the possession of property from the deceased to the subsequent of kin. Lots will rely on components such because the nation the place the property are positioned and whether or not the deceased left a will or not. In the absence of a will, the switch of any movable and immovable property (actual property property) could also be handled in another way.

    Mint reached out to consultants to grasp what an Indian must learn about inheriting any property abroad. In this text, we now have highlighted some particulars pertaining to 4 international locations—the US, the UK, the UAE and Singapore—which might be extra related for Indians.

    So, are you going to be ruled by overseas or Indian legal guidelines in such instances? According to Sonali Pradhan, head of wealth planning, Julius Baer India, when an Indian is inheriting overseas property, typically the legal guidelines of the overseas nation will apply, and Indian legal guidelines received’t come into play.

    Passing on property

    “In international locations which have property responsibility or inheritance tax, we now have seen purchasers arrange a belief for his or her property planning. This is clearly assuming that their property exceed the exemption restrict,” says Pradhan. According to her, owning a trust also ensures that the beneficiaries do not have to face any hardship by going through a court process, making it easier to inherit assets. “If a country doesn’t have inheritance tax, then most people pass on their wealth by just writing a will.”

    The US levies property responsibility and the UK has an inheritance tax on a deceased’s property. These taxes need to be paid off earlier than the deceased’s property will be handed on to the beneficiaries.

    In the UK, an inheritance tax of 40% applies when the worth of the deceased’s property exceeds £325,000.

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    In the US, the property responsibility will be 40-50% together with federal and state property duties. For a US particular person (equivalent to a US citizen or a inexperienced card holder, for instance), the property responsibility applies when the deceased’s property exceed $12.06 million. For somebody who is just not a US particular person however has property in that nation, the restrict is ready at $60,000. Note that, no property responsibility applies within the US when property are transferred between spouses on the dying of both of them.

    Singapore and UAE would not have any such tax. In India, you would not have to pay tax on any inherited property (whether or not positioned in India or elsewhere) however you’ll have to disclose them in your tax returns. Thereafter, any earnings from these property will probably be clubbed together with your earnings and taxed as such.

    So, what’s the course of for switch of property below these instances? Also, what occurs when somebody dies intestate, that’s, with out leaving a will or making a belief?

    Where there’s a Will, there’s a approach

    According to Pradhan, if the deceased has left a will, the court docket course of (getting a probate) can take no less than a 12 months or so. First, the executor has to ascertain the identification of the beneficiaries, after which apply for a probate to a court docket in that nation. Once the probate is finished, the executor has to repay taxes from the property and solely then distribute the property to these named within the will.

    But, to have the ability to pay tax within the US, for instance, the executor or the administrator should apply for a TIN, or Tax Identification Number (just like PAN in India), if the person doesn’t have already got one. “You can apply for the TIN on-line however when you don’t perceive a few of the terminologies and what paperwork are being requested for, this itself can take a while,” says Pradhan.

    If the deceased did not name any person as an executor, the next of kin will have to approach the court to get classified as an executor / administrator before proceeding further with transmission.

    “In case of a trust, transmission is a straightforward process. Devolution of assets can begin once the identity of the beneficiaries to the trust has been established by the trustee,” says Pradhan.

    In the case of UAE which follows the Sharia legislation, the state of affairs is altogether completely different.

    “Those who don’t wish to be ruled by Sharia legal guidelines, can go on their property via a belief. Alternatively, one can have a legally legitimate will (non-Arabic, written in English) by registering it within the DIFC,” suggests Pradhan. DIFC or the Dubai International Financial Centre is a separate financial centre in Dubai that follows the common law system.

    According to Bijal Ajinkya, partner at Khaitan & Co, the process of probate with the DIFC courts is simple, and more cost-effective compared to the Sharia courts, as the legal heirs can approach the authorities on their own and do not require a lawyer to represent them. Probate of a DIFC-registered will may take even less than a month.

    Having a legally valid will, or a trust, ensures that the succession goes through smoothly as documented, superseding the succession laws of the country where the deceased resided. This is, however, not so in case of intestate succession.

    Where there’s no will, there’s no easy way

    In such a situation, according to Pradhan, for immovable assets, the law of the country where the asset (property) is situated will apply. In case of movable assets, the courts will go by the succession law of that country, and in the absence of that, by the law of the deceased’s country of domicile.

    Ajinkya explains how the domicile status may get determined. There are countries which have a deemed domicile status based on which if someone has lived there for a certain number of years, then they are considered to be a domicile of that country.

    In other countries where there is no domestic law on this matter, then as per international law, one becomes the domicile of that country wherever there is an intention to reside permanently.

    For example, someone living and working in the UK for an extended period but still having economic and cultural ties with India can be considered as a domicile of India. Pradhan provides another example—if the deceased was a resident of the UAE, but was a citizen of India or had his permanent establishment in India, then the court will distribute the movable assets as per the law of the deceased’s country of domicile, which in this case is likely to be India.

    Not having a will, therefore, leaves the distribution of assets to be determined as per the laws of the relevant country. This can bring in much complexity to the entire process. Not just that, even before the law takes over, the heirs will have to first find out what assets he or she owned, where they are located and their value.

    Other challenges

    Apart from this, what are some of the other challenges that can crop up when inheriting assets? Ajinkya highlights a few.

    Recalling a recent case where the deceased had assets both in the US and in India (Mumbai), she says that in such cases there is no clarity on whether a probate will be required in both the countries or if one country’s probate will be respected in the other county too.

    Another practical issue that can come up pertains to payment of inheritance tax / estate duty for assets in foreign countries. “Under Indian law, there is a limit on how much foreign exchange can be sent out. In one case, a family in India had to seek RBI’s approval to send a higher-than-permitted amount for payment of such taxes.” For the sake of comfort, authorized heirs can select to repay the tax themselves earlier than property from the deceased’s property are distributed.

    While not all hassles will be predicted or handled, writing a will could make the method of transmission smoother for the subsequent of kin.

    Writing a will is, subsequently, obligatory, extra so when it entails property which might be positioned in a rustic that’s completely different from the place your doubtless heirs reside in.

    However, it’s essential to be sure that it’s a legally legitimate will with respect to that nation. For instance, in India, for a will to be legitimate, it should be signed by the testator and should have the signatures of two witnesses as effectively.

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  • How do I determine if I want property or succession planning?

    I’m retired and need to begin succession planning for my youngsters. Towards that finish, I need to perceive the distinction between property planning and succession planning.

     —Name withheld on request

     

    Technically, property planning and succession planning are completely different. However, relying upon the target of the particular person endeavor this train, these could overlap. 

    Estate planning is carried out through the lifetime of the particular person, with a view to streamline  asset holdings and companies, whereas succession planning is extra about who will inherit the belongings or companies. 

    Typically, if an individual owns a number of belongings or companies, then the correct strategy could be to mix the property and succession planning to make sure seamlessness through the particular person’s lifetime and submit demise.

    Since your goal is to undertake planning to your descendants, you’d be taking a look at succession planning to make sure all of your belongings are divided amongst your descendants within the method that you simply want submit your demise.

     

    My dad and mom died of Covid and  not ready any will. My siblings and I are their solely authorized heirs. We are not looking for an equal share in all their properties however favor to distribute it as per our mutual understanding. How can we legally do this?

    —Name withheld on request

     In accordance with the Indian Succession Act, if an individual dies intestate then the property is split equally amongst his / her heirs. If you and your siblings are the one authorized heirs, you’ll inherit an equal share in all of the properties. However, if you wish to distribute the properties amongst yourselves, then you possibly can contemplate getting into right into a household association beneath which you’ll report the re-alignment of possession of the properties. 

     With the household association, you possibly can contemplate getting into into and registering ‘gift deeds’ or such different paperwork for every of the properties whereby, the opposite siblings will present their share within the related property in favour of the one that is entitled to the identical as per your mutual understanding. By execution / registration of the aforementioned paperwork, you and your siblings can then take care of the properties which have come to your respective shares as chances are you’ll deem match. However, please word that every one the heirs of the deceased individuals ought to execute the association and the paperwork to keep away from any litigation / dispute in future.

    Hemang Parekh is associate and Mitali Naik is affiliate associate, at DSK Legal

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  • Why writing a Will is important to property planning

    Today, succession planning has turn out to be important for folks from all walks of life. Usually, one possesses movable monetary property within the type of money mendacity in financial savings accounts or mounted deposits, or permitted quantities in international financial institution accounts; securities held in portfolio administration providers, mutual fund investments, bonds and different debt devices, shares, and many others. In addition, one could have immovable property within the type of business, agricultural or industrial land, and residential items reminiscent of homes, flats, and many others .

    Nominee versus Will

    Under the regulation, nominee is the trustee. So, whoever is appointed because the nominee is deemed to be the trustee for all of the authorized heirs. The place of the nominee is fiduciary and important because the nominee holds property for all of the authorized heirs. Most folks misread this provision assuming that after a nominee is appointed, the nominee will obtain the property as the only real beneficiary. This just isn’t the proper place. 

    Nomination helps the nominee to obtain the property in a hassle-free method with out going to the court docket to acquire the succession certificates or the probate of the desire. It is vital that the nominee is talked about as a beneficiary within the will. 

    The Will must be executed in accordance with the relevant legal guidelines and laws for the respective faith and domicile. If a Will just isn’t executed and an individual dies intestate (and not using a Will), all authorized heirs will get equal share below the Hindu Law. Hence by executing the Will, one creates differential rights for the authorized heirs. 

    In the Will, one could say that every one property will go solely to the spouse whereas if there isn’t a such Will, then for a Hindu particular person, the property will go to all authorized heirs equally i.e., the mom, spouse and youngsters. 

    Points to notice

    The Will is a crucial instrument for succession planning. Any one that has attained 18 years or above, and is of sound thoughts can execute a Will. 

    The Will have to be executed appropriately with two testifying witnesses. The witnesses may very well be members of the family, associates or third events however the beneficiaries shouldn’t be the witnesses. Many a instances, a Will is made with out complying with the authorized necessities and this places the beneficiary in a critical drawback. It’s like a gun with out bullets. 

    Neither stamp responsibility is relevant on the Will neither is the registration with the sub registrar of assurances necessary. Registration of Will and / or videography is usually recommended on a case-to-case foundation and relying on the connection with the authorized heirs and the potential of any of the authorized heirs creating any potential dispute.

    Any individual can himself / herself write the Will even by hand. A Will ought to clearly point out how the property will probably be distributed and to whom. 

    The one that executes the Will is known as the testator, who has an choice to appoint an executor below the Will. The executor is the one that carries out the intention of the testator and distributes the property to the beneficiaries after complying with all of the required formalities. If all these items are taken care of, a problem to the Will is tough to be raised. 

    One can change the Will as many instances as one may need throughout one’s lifetime. Further, all of the property that are talked about within the will can be utilized by the executant of the Will in such method as he could like earlier than the loss of life of the one that has made the Will. And, the Will comes into play solely upon the latter’s loss of life. 

    In a number of the Indian states, it’s necessary to take a probate of the Will from the Court and if the Will is executed correctly and is uncontested, such order is obtained inside a yr or so. The simple answer to deal with succession is to do correct nominations and depart a Will.

    Rajesh Narain Gupta is managing accomplice, SNG & Partners, Advocates and Solicitors.

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