Legal heirs who feel deprived of their ‘rightful’ share in the property of the testator would not like to consent to the fact that the will is authentic. Frivolous objections are raised and ultimately it is difficult to give effect to the wish of the testator.
V. P. Raman
If you have property in Chennai which you intend to bequeath or if you intend to execute a Will in Chennai in respect of properties situated outside Chennai, expecting your fond remembrance by your loved ones, then think again.
You may be putting your legal heirs or beneficiaries through a lot of inconvenience contrary to the belief that you are doing them a favour through your will. And instead of making prayers for your continued well-being, your beneficiaries may be making prayers of a different kind, in petitions filed before the courts. This is due to an archaic law that exists till date called ‘probate’.
A will, when executed by a Hindu, Buddhist, Sikh, Jain or Parsi in respect of properties situated within Chennai or when executed in Chennai has to be probated or ‘authenticated’ by the court. This requires the payment of stamp duty that amounts to three per cent of the value of the property plus legal expenses, which will amount to a staggering figure. The problem only begins here.
To probate a will, the consent of the other legal heirs apart from the person petitioning the court is required (if there are many legal heirs) failing which, the probate petition is converted into a testamentary suit which may take several years to culminate.
Why will, when you can settle?
Many a time, legal heirs who feel deprived of their ‘rightful’ share in the property of the testator would not like to consent to the fact that the will is authentic. Frivolous disputes and objections are raised and ultimately the wish of the testator is difficult to be given effect to.
A better alternative to a will may be found in the form of a settlement deed. A settlement deed is not the same as a will but it can have many things which are usually found in a will. The main drawback of a settlement is that it cannot be revoked at the desire of the settlor or the person who executes the deed unless such right has been specifically retained by the settlor. A will can be revoked by the executor any time before his or her death. However, it is commonly found in many cases that the executor of the will is certain to distribute the property in favour of certain individuals.
Let us assume for convenience that a father desires to give certain properties to his children but also wants to ensure that his wife would have the right to enjoy the property during her lifetime. Normally these are rights given by way of a will.
However, not probating a will means that the persons claiming rights under the will cannot assert their rights as legatees or executors in a court of law. In effect, if someone else claims to have a share in the bequeathed property, the actual person to whom the testator left his property or appointed as executor cannot claim to have legal rights under the will in a court of law.
Issues in Settlement
A settlement deed can prove to be a suitable alternative in such situations. In such situations, the owner of the property faces certain apprehensions. They may be: “Can I retain a life interest in the property and also enjoy the rental income from the property during my lifetime if I execute a settlement deed?” Yes. “Does not a settlement deed transfer the entire interest in the property on the settlee, thereby depriving me of any interest during my life time?” No.
You can be protected by incorporating the necessary clauses. The same life interest that the executor of the will retains in the document can be incorporated in the settlement deed too.
“If I ultimately want my grandchildren to get the property, is not the will the only way to ensure this?” No. It can be done through a settlement deed also. You can give yourself and your children a life interest and vest the remainder in your grandchildren who will get the entire interest in the property after the lifetime of the settlor and their parents.
“What if I have already written a will and it has been registered?” You can revoke the will and then ‘settle’ the property on any person you want to. It may even be the same person(s) who are named in the will to save on stamp duty and other expenses.
Benefits in Settlement
The answers to these queries might make you think that there is no difference between a will and a settlement. There are quite a few. In a settlement deed, there is an immediate transfer of interest. This may be a contingent interest or absolute interest. Once this vests absolutely in the settlee, it cannot be revoked by the settlor. In the absence of absolute vesting revocation is possible. A will takes effect only after the lifetime of its maker.
There are three distinct advantages in executing a settlement deed. First is the tremendous saving of money and time. The maximum stamp duty you pay while executing a settlement deed is Rs 10,000 — plus registration expenses of about Rs 2,500. Second, it is sufficient if the settlor alone goes to the Registrar to register the deed. There is no need for obtaining the consent of the legal heirs as is the case while probating the will.
Third, if someone has to challenge a settlement, they will be challenging a right that has accrued in favour of the settlee, whereas in the case of a will, the beneficiaries under the will would require the consent of the other legal heirs for probating to establish themselves as the rightful beneficiaries under the will.
Like Chennai, the law of probate has select application to Mumbai, Kolkata and other notified areas. Needless to say, the stamp duty rates may differ in those cities. So, if you are asked about the future, as to what you ‘will’: Say you ‘settle’. Like the word, the deed too has a ring of assurance.