My father and I together bought a flat in Thane, 5 years ago. The purchase agreement and the share certificate have my name as the co-owner as I paid 50%. In his Will, my father has bequeathed his 50% share to my son. The Will was registered and has been probated after his demise. Do I become the first holder of the flat as the existing co-owner? Or, will my son’s name appear first as my father was the first-named shareholder? Will the provisions of the co-operative society laws apply, or that of the Will?
We understand that you and your father, have paid 50% share each, and are the co-owners of a flat situated in Thane, and that the Society has issued a share certificate, in which, it has endorsed your father’s name first and your name second.
Under succession laws, a Will is a document by virtue of which a person bequeaths his property, to the persons named in the Will. Since your father, in his Will, bequeathed his 100% (being 50% undivided share) share in the flat to your son; and after the demise of your father, in terms of his Will, which was probated, your son (who inherited the flat under the Will) inherited your father’s undivided rights in the flat, thus becoming a co-owner. These rights of ownership flow from the law applicable to immovable property in India, read together with the succession laws, by virtue of which your son becomes the co-owner of the flat. As far as the membership rights of the Society go, laws governing membership and voting rights of members in a society, (in this case the Maharashtra Cooperative Societies Act) would apply. As your father’s name was recorded as the primary member of the Society having voting rights (by virtue of his name recorded first in the member’s register as also the share certificate), his absolute interest would, in terms of his wishes under his Will, be transferred to your son. The Society would therefore make an endorsement in the share certificate, replacing your father’s name with your son’s. Accordingly, your son’s name will appear first and your name second.
A valid bequest was made by your father in his Will, owing to which your son has inherited the undivided rights of your father in the flat (being 50% undivided ownership right as also the membership interest in the Society). In terms of the provisions of Maharashtra Co-operative Societies Act, the Society will (after complying with the necessary formalities) give an effect to the aforesaid bequest, by making an endorsement in the share certificate, substituting your father’s name with your son’s.
I am a US citizen and moved to India 2 years ago. I am planning to start a charitable old-age home, for which I need to create a Trust deed. As a US citizen, but resident of India, what is the process to create a Trust? Both the Trust and its assets will be in India. Do I need to report the Trust to the US?
There are two basic things required to be able to form a Trust—power of disposition over property and competence to contract.
Setting up a charitable old age home would come under the purview of a Public Charitable Trust. There isn’t any Central Act applicable for public Trusts in India, but various states have their own Acts. If we assume that you will set up the Trust in Maharashtra, then provisions of Maharashtra Public Trust Act, 1950, would apply. In states that do not have a Public Trusts Act in force, provisions of Indian Trusts Act, 1882, apply.
Some basic details required to incorporate a Trust are drafting a deed of Trust and recording in it details of :
(i) The settlor, trustees, and the intended class of beneficiaries (public at large),
(ii) Objectives of the Trust,
(iii) Name of the Trust,
(iv) Minimum and maximum number of trustees,
(v) Address of the registered office of the Trust, and
(vi) Rules and regulations.
The deed of Trust has to be registered.
Some specific requirements have to be fulfilled for setting up the Trust, which would depend on the peculiarity and complexity of each Trust. You would require legal assistance in the matter. Trusts in India may be required to comply with the rules of the Foreign Account Tax Compliance Act (FATCA) to report all details to the Internal Revenue Services of US. It would be ideal to seek consultation of a lawyer practicing in US laws.
Amit Kolekar is associate partner, Rajani Associates.
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