Inheritance: How to draft a will that cannot be easily challenged

Registration of will ensures that signatures and will are not fake; it doesn’t comment on content of the will. (istock)
Registration of will ensures that signatures and will are not fake; it doesn’t comment on content of the will. (istock)

Summary

Drafting a will is necessary to ensure smooth transmission of assets, including property, to the next of kin.

Many people tend to overlook the importance of a will in financial planning, considering it the least prioritized document.

Any individual can draft a will that outlines how they would like their assets to be distributed after their deaths. Having a will can simplify the inheritance process for family members of the deceased and spares them from lengthy and costlier legal procedures.

Where a will exists, an appointed executor oversees the asset distribution, making the process smoother. Nowadays, digital will services are available, which make writing and saving a will much easier, unless there are complexities like cross-border transfers or family businesses.

Yet, there are certain guidelines for drafting a will that many people are not aware of. Rishabh Shroff, co-partner and head-private client at Cyril Amarchand Mangaldas, addresses some of the frequently asked questions on succession planning in an interview with Mint. Edited excerpts:

What are the most basic requirements of drawing up a will?

As per the Indian succession law, the fundamental requirement is to have a will that is signed and witnessed by two individuals who are present when the testator or testatrix signs it. Apart from this, there are no other specific legal formalities for creating a will. Additionally, there is no strict requirement regarding the format in which the will should be written. It is completely open to you to craft your will as you may choose to do.

What is the purpose of registering a will?

Registered wills are not very common in practice, accounting for a handful of cases compared to unregistered wills. Registration serves only to authenticate the signatures of the individuals who sign the will and is used to ensure a will is a genuine one, and not forged or fake. It does not provide any comment on the contents of the will. From a practical or legal perspective, registration is not mandatory but it can give absolute certainty that the will was made by a person of sound mind and eliminates the possibility of future challenges to its authenticity.

Should an executor’s name be mentioned in the will?

An executor is an individual appointed by the person creating a will (referred to as the testator) to carry out the instructions and wishes stated in the will after their death.

It is highly recommended to include the name of the executor in your will. This individual can be your surviving spouse, eldest child, youngest child, best friend, or anyone you choose.

Should the executor be present when writing a will?

There is no formal legal requirement in that regard. However, say, if you have appointed your best friend as the executor, it is crucial to have a discussion with them about the existence of the will, its physical location, and, to some extent, the general details of your assets. This ensures that the executor is not caught off guard and ensures a smoother execution of the succession plan.

 

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Can a beneficiary be the witness?

Although it is technically possible, it is strongly discouraged. There have been numerous cases and legal precedents questioning the implicit conflict of interest that arises when a beneficiary serves as a witness to a will, particularly when such a beneficiary is given a higher share of assets as per the will. This situation may raise concerns about bias or undue influence.

Are there any rules that an executor cannot be a witness?

It is advisable to maintain separation between the various parties involved. In the market practice, it is often recommended to have a doctor serve as one of the witnesses. This helps address one of the primary grounds for challenging a will. By having a doctor certify your sound mind and body on the day you sign the will, and the physician act as a witness, this major challenge can be mitigated. The second witness can be a lawyer. This way, we can have an entirely independent set of witnesses.

Is it necessary to mention the guardian of a minor child in the will?

While the default guardian would typically be the surviving spouse after one’s death, it is advisable to have a clear plan in case both parents die. The guardian could be a grandparent, a surviving sibling, or someone else trusted by the family. It is important to clearly specify these names in the will to avoid any ambiguity.

Are witnesses required to review the contents of the will?

No

Is it necessary to mention the current value of assets in the will?

No, it is not required as the value of assets tends to fluctuate over time. However, it is advisable to provide an itemized list of your assets as of the date when the will is made.

The valuation of assets becomes relevant during the probate process, which varies depending on the court where the filing takes place.

Between a will and a relinquishment deed from other legal heirs, which is the better option?

It is generally preferable to have clarity in the will itself regarding the distribution of property, rather than relying on a relinquishment deed later. A relinquishment deed becomes necessary when the property has been passed on through the will or intestate succession to more than one individual and one of the heirs decides to give up their rights in the property. This can potentially involve tax implications, stamp duty requirements, and procedural complexities. To simplify matters and minimize expenses, it is advisable to clearly outline the distribution of assets in the will, avoiding the need for a relinquishment deed after the individual’s passing.

What succession law would be applicable in the case of inter-faith marriages?

In the event of interfaith marriages, such as a union between a Hindu and a Muslim, the applicable succession law in India would be the Indian Succession Act.

Can we revoke or amend the will?

This situation is actually quite common. People may create a will at a certain point in their lives when their family is young or small, and it serves their needs at that time. However, as circumstances change with major life events, the family often chooses to either create a new will to replace the old one or make an amendment known as a codicil.

A codicil allows for specific clauses in the existing will to be modified, such as changing the beneficiary of a property. There is no definitive answer regarding how often it should be done. The key is to revisit and update the will whenever significant life events occur or when changes to the estate are made.

Are there any special rules applicable if legal heirs are NRIs?

If the legal heirs are non-resident Indians (NRIs), specific rules come into play under the Indian Foreign Exchange Management Act (FEMA) 1999. FEMA imposes certain limitations on the transfer of assets, including restrictions on the amount of cash that can be taken out of India and regulations governing the transfer of shares (in any business) between NRIs and residents. So, these rules have to be complied with during the succession.

Can someone abroad prepare a will for his/her Indian properties?

Indeed, it is quite common. When individuals reside in countries such as the US or UK, they often possess two categories of assets. Firstly, they may have assets located in the country they reside in, including a local bank account, properties, and more. Secondly, they may possess assets in India, which could consist of self-acquired assets or inherited assets from their extended family.

In such cases, it is advisable for individuals to prepare two separate wills. One will pertain to their global assets outside of India, while the other will specifically address their Indian assets. These two wills operate concurrently. The Indian will must comply with Indian laws.

What is a letter of administration?

In the absence of a will, either because the person died without one or the will is deemed invalid, the family can apply for a letter of administration. This document operates similarly to a will, but instead of the will dictating the distribution of property, it follows the letter of law. For instance, in the case of Hindus, the property would pass to the class one heirs as determined by the law under the Hindu Succession Act.

Can a registered will be challenged too?

Absolutely possible, a registered will can still be subject to challenges. In fact, this is a common aspect of many disputes in India. However, the advantage of a registered will lies in the fact that its authenticity is not called into question. Whilst registration does not prevent challenges, it does help to mitigate challenges.

At what point does establishing a private trust become cost-effective?

We commonly observe that a trust is used among business families when the assets include not only liquid wealth, residential properties, and real estate assets, but also an operating family business and other significant assets. Setting up trust during the person’s lifetime ensures transfer in a cost-effective manner.

In addition to a will for assets like immoveable property, a trust would be highly advisable for their business assets such as shares in their family business.

The structure also offers a certain level of protection against bankruptcy and creditors at the time of implementation.

If you gift a property in your name to a trust, there would be a requirement to pay stamp duty depending on the property location.

What are the points to note when writing a digital will?

Nikhil Varghese: For the will to be legally valid in India, it has to printed on a plain paper and requires the signature of the testator along with at least two witnesses is mandatory. Digital signature is not valid for wills currently in India, currently. Before initiating the online will-making process, gather all the necessary information, including identification proof and address proof. Choose a reliable online will provider who can facilitate review and edit the will periodically.

Can a Muslim write a will?

Bidan Chandran: A Muslim can certainly execute a will, however, he cannot give away more the 1/3 of the property. Rest 2/3 of his property will devolve according to his personal law.

What is a probate and when is it mandatory?

A probate is a copy of will that is certified under the seal of a court of competent jurisdiction.This helps the executor to distribute the estate as mentioned in the will.

As per the Indian Succession Act and the Hindu Succession Act, a probate is required for wills signed in Mumbai, Chennai, and Kolkata, as well as for assets located in these places. Additionally, depending on specific circumstances, other state laws may come into effect and may specify how a voluntary probate can be filed e.g. in Delhi.

In practice, it is generally advisable to obtain a probate, especially when dealing with real estate properties that have been inherited through succession. Having probate provides certainty of titles and is particularly important for high-value assets such as flats, apartments, agricultural land, and similar properties. It helps provide a clean title.

Is there any time limit to obtain a probate?

The process of obtaining probate typically takes place after the person who made the will has died. While there is no strict timeline prescribed by law for filing a probate, it is good to initiate the process as soon as possible after the individual’s death. In terms of market practice and the perspective of some judges, a common guideline is to file for probate within approximately seven years of the person’s demise.

Can a housing society demand a probate order?

When it comes to transferring the ownership of a society flat to a legal heir such as a spouse or children, it is common for housing societies to request a probate order issued by the court. This requirement varies from society to society but is particularly prevalent in Mumbai.

Can future property buyers insist on a probate?

For high-value properties acquired several decades ago, it is not uncommon for sophisticated buyers to seek additional assurance regarding the property’s ownership. This may involve inquiries into the property’s acquisition, the chain of title, and the manner in which it has been passed down. This is to mitigate potential future claims.

What is a settlement deed?

In situations where siblings or other family members are engaged in a legal dispute or family conflict that is being adjudicated in court, families often choose a more practical approach to resolve the matter. They opt to settle the dispute by mutually agreeing on the division of assets, and the legal document that formalizes this agreement is known as a settlement deed. This practice is quite common, primarily due to the lengthy duration of family dispute resolution in Indian courts.

Is an affidavit, no-objection certificate (NOC), and newspaper advertisement required for a succession of immovable property?

To ensure a clean title, one common practice is for the executor to publish an advertisement in the local newspaper where the property is located. This advertisement notifies the public about the transfer of the property and provides an opportunity for any potential objections or claims to be raised. This step helps mitigate the risk of future litigation.

A few banks mandate that a nominee obtain an indemnity bond signed by all legal heirs to transfer the financial assets of the deceased…

Typically, if the nomination has been done properly and well in advance of any succession event, it is considered sufficient for the transfer of assets. While it is not a common practice in most cases, some banks may require an indemnity bond signed by all legal heirs, especially when a larger family is involved, before transferring the amount to the nominee.

If a legal heir submits the required documents to the bank before the nominee approaches, will the bank transfer the money to the former?

The bank would typically wait for the nominee to come forward. The bank would prefer to engage with the nominee regarding the transfer of the assets, but ultimately, the decision on how the property should flow would be determined between the nominee and the legal heir.

(Nikhil Varghese is co-founder of Yellow, a digital will & estate planning app, and Bidan Chandran is senior advisor at law firm MV Kini.)

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