A will or testament is a legal declaration by which a person, called the testator, names one or more persons (beneficiaries) to manage her/his estate and provides for the distribution of her/his property at death.
Even though the law related to Wills varies state to state, one rule holds true: if one doesn’t have a Last Will and Testament, the Government makes one for them. In India, in the absence of a Will (i.e. when a person dies intestate), the estates and assets of a person are devolved according to the provisions of the Hindu Succession Act.
Therefore, even though one might consider it morbid to think about death and make a Will, the importance of making one cannot be over-emphasized. The following are some essential reasons why one must make a Will in time:
Making a Will is often accompanied by morbid thoughts of death. However, it is necessary to be sure of what one wants to write in a will as these are decisions one does not want to leave on the State. While making a Will, one must make careful and deliberate decisions with respect to their children, business and assets.
The following are some things one must be clear about before they make a Will.
Whether the adult would be willing to take care and nurture children that are not her/his own. The guardian should be named in the will only after the following considerations are answered satisfactorily.
A Will is a legitimate declaration of a person’s intention on distributing his/her self-acquired property amongst his/her legal heirs after his death.
The rightful age of writing a Will is above 21 years. a registered Will is more legally binding, in order to write a Will, but it is not necessary. A plain paper is sufficed to write a will provided it is in the hand-writing of a person making a will.
A will ensures the financial security of your spouse, minor children or sons and daughters after your death. It allows you to distribute your wealth after your death and helps in avoiding any family clashes and smoothens the transfer of wealth.
In India, there are separate religious laws that govern the Will Laws. It includes Indian Succession Act, 1925, Hindu Law, Muslim Law and Indian Registration Act, 1908.
Under Hindu Succession Act, if there is no will, all the assets and liabilities of the deceased person are distributed among his/her legal heirs on the basis of their closeness with the deceased. It is applicable on Hindus, Buddhists, Jains, Sikhs etc.
Under Muslim Acts, here Will is better known as Wasiyat, where the Muslim is morally responsible to make the division of his/her estate/property. He/She can only bestow his/her 1/3rd share of his/her total property in a will which will be validly executed after his/her death. Not only that, he/she may accept this 1/3rd share to 1/4th share only after getting the consent from all the heirs or if only heir is husband or wife.
Inheritance in Christians in India is governed by Indian Succession Act, 1925, which defines total and partial intestacy if the deceased does not bestow his/her beneficial interest in any of his/her property by way of making will.
Step 1: Declaration in the beginning: In the first paragraph, you have to declare that you are making this will in your full senses and free from any kind of pressure. You have to mention your name, address, age, etc at the time of writing the will so that it confirms that you really are, in your senses.
Step 2: Details of Property and Documents: The next step is to provide list of items and their current values, like house, land, bank fixed deposits, postal investments, mutual funds, share certificates owned by you. You must also indicate, where all these documents are stored by you. In all probability, these are in your bank safe deposit box.
Step 3: Details of ownership: At the end of the will, you should mention who should own your assets items and in what proportion, after you have gone. If you are giving your assets to a minor, make sure you appoint a custodian of your assets till the individual you have selected, reaches an adult age. This custodian obviously, has to be a trustworthy person.
Step 4: Signing the Will: At the end, once you complete writing your will, you must sign the will very carefully in presence of at least two independent witnesses, who have to sign after your signature, certifying that you have signed the will in their presence. The date and place, also must be indicated clearly at the bottom of the will. Make sure you and the witnesses sign all the pages of the will.
A trust is the obligation placed on person with whom confidence or authority is placed. It is a confidence reposed on him by conveying to him the legal title to the property which he is to hold for the benefit of others.
Trust is defined in section 3 of the Trust Act, 1882 as” an obligation annexed to the ownership of property and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another or of another and the owner.
A trust is not a contract of agency to hold the property in this there is a transfer from the owner to the trustee subject to certain terms and conditions. A trust is essentially a transfer of property by one to the other to be held by the other for the benefit of some person or for carrying out some object. The purpose of a trust must be lawful, that is,
A trust can be created by two ways. One by a non-testamentary document and another by a testamentary document such as a will.
A trust regarding an immoveable property cannot be created orally but it must be by a document duly registered. A trust of a moveable property can be created either by a document or delivering the property to the trustee with necessary oral directions. If the directions are given in writing it would amount to a trust by a non-testamentary document which may or may not be registered.
A person who creates a trust is called the settlor, the person to whom the property is transferred on trust is called a trustee and the person for whose benefit the property is transferred is called the beneficiary or “cestuique trust”.
A trust relating to an immoveable property is required to be created by a document and such document must state and contain five essential things with reasonable certainty namely:
A trust can be created by the author himself declaring that he would hold the property, not as owner, but as a trustee for the benefit of some person or persons including himself and in such case the transfer of property is not necessary but the declaration of trust is by the owner and he alone should be the trustee. Such a declaration would, however, require registration under the Registration Act.
A trust can also be created by a testamentary document i.e. Will and the same conditions as mentioned in Section 6 of the Trust Act are required to be fulfilled. Such Will also does not require registration.
A trust is also created by application of employed trust or as a constructive trust or as derivative trust. But they are created by fiction by of law and cannot be subject matter of conveyancing.
A Trust can be created by any person competent to contract or even by a manner with the authority of a competent court and respect of any property which is transferable and over which the author of the trust has dispossessing power.
A Trust may be Private and Public.
When the purpose of the trust is to benefit an individual or a group of individuals or his or their descendants for any legal person and who is capable of holding property, it is a private trust.
When the purpose of the trust is to the benefit the public or any section of the public, it is public trust.
A trustee can be any person that is, an individual or a corporate body or a corporate sole, capable of holding property and competent to contract. and he must accept the trust.
Although the usual scenario to be expected in the event of demise of our loved one, is that he or she must have left a Will to ensure our security and smoothen the process of distribution of his/her properties. But what happens if there is no Will? To whom his/her will property pass on? And what are the complications to be expected in such events. The Hindi Succession Act,1956 has set out certain rules to govern the distribution of the property in the absence of a Will.
Intestate Succession means when person dies without making a Will, which is capable of taking effect. The property devolves upon the wife or husband or upon the relatives of the deceased in the following manner.
All class one legal heirs have equal rights on the deceased assets. In case of Hindus, class one legal heirs include your mother, spouse and children. If any of your children has died, then their children and spouse have an equal share.
If you have no class one legal heir, then your class two legal heirs can stake a claim. Class two heirs include your father, siblings, living child.
The property of an intestate devolves upon the wife or husband, or upon those who are of the nearby of the deceased, in the order and according to the rules given below.
Where the intestate has a widow –
If he has also left any lineal descendants (Lineal descendants mean descendant born in wedlock only) one third of his property shall belong to his widow, and the remaining two-thirds shall go to his lineal descendants, according to the rules here in after contained.
If he has left no lineal descendant, but has left persons who are of kindred to him, one-half of his property shall belong to his widow, and the other half shall go to those who are of kindred to him, if he has left none who are of kindred to him, the whole of his property shall belong to his widow.
Where intestate has left no widow, and where he has left no kindred –
Where the intestate has left no widow, his property shall go to his lineal descendants or to those who are of kindred to him. If he has left none who are of kindred to him, it shall go to the Government.
Where intestate has left child or children only –
Where the intestate has left a child or children, but no more remote lineal descendant through a deceased child, the property shall belong to his surviving child, if there is only one, or shall be equally divided among all his surviving children.
Where intestate has left no child, but grandchild or grandchildren –
Where the intestate has not left surviving him any child, but has left a grandchild or grandchildren and no more remote descendant through a deceased grandchild, the property shall belong to his surviving grandchild if there is only one, or shall be equally divided among all his surviving grandchildren.
Where intestate leaves lineal descendants not all in same degree of kindred to him –
If the intestate has left lineal descendants who do not all stand in the same degree of kindred to him, and the persons through whom the more remote are descended from him are dead, the property shall be divided into such a number of equal shares as may correspond with the number of the lineal descendants of the intestate who either stood in the nearest degree of kindred to him at his decease, or, having been of the like degree of kindred to him, died before him, leaving lineal descendants who survived him.
Moveable assets include bank deposits, mutual funds and other investments, such as post office schemes, made with financial institutions.
At the time of investment, almost all of these require the investor to fill up a nominee name. If the nominations are in place, then, banks and financial institutions will release the funds, to the nominee mentioned.
But a nominee is only a trustee of the funds, which he is expected to safeguard till such time as the legal heir or beneficiary can be determined and the proceeds can be passed on to him. This means that although the banks or financial institutes release the money to a nominee, other legal heirs can stake claim.
If there is no nominee and the amount is fairly small, banks will release the funds up to a limit, provided the person withdrawing the money signs an indemnity stating that he is in possession of the money and will be held responsible for payments in case a more authentic claimant appears.
If the funds are in excess of this limit and there is no nominee, then the banks will ask the person staking a claim to produce a succession certificate.
A succession certificate establishes who the legal heirs of the deceased are and gives them the authority to inherit debts, securities and any other assets. The beneficiaries can file a petition for a succession certificate in a district or high court as the two have concurrent jurisdiction.
In case of an immovable property that is not disputed, only the title of ownership has to be changed. This can be done at the relevant district authority under whose jurisdiction the property falls.
To get the holding transferred in name of the beneficiary, it requires a series of documents, such as a formal application and an affidavit, the death certificates of the deceased and any other deceased class one legal heir, relinquishment deeds from legal heirs who are willing to concede their share, indemnity bond and undertaking and anything else that may be demanded.
In case the matter goes to the court, the court will first ask the beneficiaries to determine if the property can be divided physically. If this is not possible, then one heir can buy out the share of the other. This is called right of pre-emption.
The Hindu Succession Act, 1956 lays down provisions for distribution of property of female Hindus.
The property of a female Hindu dying intestate shall devolve according to the rules set out in section 16 of The Hindu Succession Act, 1956
Any property inherited by a female Hindu from her father or mother shall devolve, in the absence of any son or daughter of the deceased (including the children of any pre-deceased son or daughter) upon the heirs of the father.
Any property inherited by a female Hindu from her husband or from her father-in-law shall devolve, in the absence of any son or daughter of the deceased (including the children of any pre-deceased son or daughter) upon the heirs of the husband.
According to section 15 the distribution of the intestate’s property among those heirs shall take place, according to the following rules, namely: –
Among the heirs specified in sub-section (1) of section 15, those in one entry shall be preferred to those in any succeeding entry and those including in the same entry shall take simultaneously.
If any son or daughter of the intestate had pre-deceased, the intestate leaving his or her own children alive at the time of the intestate’s death, the children of such son or daughter shall take between them the share which such son or daughter would have taken if living at the intestate’s death.
The devolution of the property of the intestate on the heirs referred to in clauses of sub-section (1) and in sub-section (2) of section 15 shall be in the same order and according to the same rules as it would have applied if the property had been of the father’s or the mother’s or the husband’s as the case may be, and such person had died intestate in respect thereof immediately after the intestate’s death.
So if the property of a Hindu female dying intestate is to devolve to the heirs of her husband or her father, then it shall be transfered to them in accordance with the provisions of section 8 to 12 of the Hindu Succession Act as these sections deal with the rules of succession in case of Hindu males. And if her property is to devolve upon the heirs of her mother, then the property shall devolve upon them in accordance with the provisions of section 15 and 16 of the Act as if the property is of her mother and not that of the deceased female Hindu.
A will can be easily changed or revoked during the life of the testator. A testator may revoke his Will if he/she wishes to nullify the intentions expressed in the Will to be given effect to after his/her passing.
According to Indian Succession Act, 1956, every Will shall stand revoked by the marriage of the testator. Marriage creates new obligations and duties for the testator which might influence his/her decision with regard to the deposition of the properties after the death. However, automatic revocation of a Will is not applicable for Muslims, Hindu, Buddhists, Sikhs and Jains.
By Another Will
A new Will created will cause revocation of all former Will. To avoid disputes or discrepancies, a Will made after an existing Will should have a clause revoking former Wills.
By implied action
If a new Will contains no words for revocation, but the Will cannot stand with former Will, then it can be inferred that the testator had revoked the former Will. It is not necessary for testator to state his reasons for revoking the former Will.
Burning or Tearing
A Will can be burned or torn by the testator or by someone else in his/her presence. However, cancellation of a Will by drawing lines across it is not one of the modes of revocation.
Cryptocurrencies are the new investing avenue. As of January 2018, there are over 1384 cryptocurrencies and they are still growing. As per the market capitalization, bitcoin is the largest blockchain network. A cryptocurrency is a virtual or digital currency designed to work as a medium of exchange.
With this huge boom, investors are attracted to the crypto world. With a steep rise in investment in cryptocurrencies have you ever thought of what will happen to these digital currencies after your demise? These digital assets are encrypted and heavily protected by passwords. You must have really not thought about the inheritance of digital assets. When it comes to physical property, like house, car or land it is easier to transfer it to your successors but how will you transfer your digital assets.
There is no guarantee of life. With the increase in heart diseases and terminal illnesses, you may never know what will happen the next moment. Therefore, if you are investing in digital assets it is the need of the hour to understand the inheritance issues around digital currency.
To facilitate this mechanism, Safe haven has devised a platform to enable inheritance of digital currencies. If you are investing in bitcoins and are scared of losing your assets, safe haven is the solution for you.
Safe Haven has a platform to safely share the keys of cryptocurrencies with your chosen people by using TFC share distribution key, Escrow Protocol and their Trust Alliance Program. Through their portal, Safe Haven ensures that these digital assets are protected and handles inheritance. Through its platform, it stores and encrypt information on the blockchain network and makes it inheritable which is only accessible to the categorically mentioned recipients. Safe haven protocol distributes the shares in such a way that the initiator keeps, at all cost, the control over his assets.