The Hindu Business Line : Sharing a legacy

Inheritance rights apply to a person who can stake claim to a property by virtue of being an offspring of the deceased owner. A person is said to have died in testate if he or she fails to execute any will during their lifetime. In the event of death in testate, the lineal descendents gain legal right over the property. Such inheritances include real estate also.

Self-acquired/ inherited property

Self-acquired property can be bequeathed to any person that the owner chooses. It need not necessarily go the owner's children. Property can even be bequeathed to total strangers. However, any such intention should be recorded in a duly executed will, when one is in sound mind.

Such a will cannot be questioned and becomes binding on the family members. In the absence of such a written will, the deceased person's wish may be carried out by the descendents. But the descendants are likely to question the validity of such actions and it may result in legal battles.

But when the property in question happens to be an inheritance, the descendents acquire succession right over it. Such property cannot be willed by the deceased. Even if he or she proposes to dispose of such property, the consent of all the legal right holders would be essential.

Preamble of the sale deed

When buying a property the preamble to the sale deed becomes significant. The sale-deed should clearly mention the source of acquisition of the property.

If the sale deed mentions "whereas the property was inherited by the vendor vide a will dated... " it becomes an inherited property. The consent of all the legitimate right holders in the property would be essential.

But if the sale deed mentions "whereas the vendor has acquired the property for a consideration of Rs ... vide a deed of sale dated... " it is a self-acquired property and the consent of other family members is not required.

Property acquired out of sale proceeds of inherited property

A person may inherit a property and later dispose of it. The sale proceeds are used to acquire another property. Can the other right holders stake a claim in the new property?

Settlement of HUF property

When a person acquires a property through the partition of a Hindu undivided family, all family members have a right in the property. It constitutes a HUF property and cannot qualify as self-acquired.

Conveyancing of property

If the property has been inherited or gifted, the title transfer deeds have to be necessarily registered. Under the transfer of property Act, the title does not get transferred in the name of the donee or the beneficiary unless the sale deed is registered (technically called conveyancing). This is subject, however, to the provisions of Sec.53A.

Registration and mutation of property

Property registrations take place at two important places. One is the office of the registrar of assurances and the other, the municipal records. Upon a person's death, the death certificate and succession certificate must be produced before the registration authorities to record the change in ownership of the property. This document should be produced before the municipal authorities to effect mutation in their records. The change of ownership is complete only when both the offices issue the relevant letters.

The girl child

The late Mr N.T. Rama Rao, former chief minister of Andhra Pradesh, brought in legislations to secure property rights for the girl child. The point to be considered is whether the girl's marriage makes any difference in the matter of inheritance. An unmarried girl gets an equal share in the property of ascendants. Similarly a widow too would get an equal share along with the other children.

Property inherited on the death of mother

When a person dies in testate and the property is inherited by his children and widow, it becomes inherited property. But, does the mother's property (inherited on the death of her husband) passing on to the children after her death, constitute inherited property? During her lifetime, does the widow have the right to dispose of the property inherited from her husband? Does it require the consent of her children?

When the plot is inherited or settled upon a girl child and, later on, she constructs a residential house upon it, does she have the right to dispose of the property?

When buying a property, one should exercise caution in these matters and seek professional advise to safeguard against possible disputes at a later date.

The author is a Hyderabad-based chartered accountant.

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