‘Forming a trust safer than writing a Will’

Sejal: To understand succession laws, one must differentiate between testamentary succession and non-testamentary succession. Testamentary succession is applicable when a written will has been created. Intestate succession is applicable when a Will has not been created and the properties of the deceased are to be distributed as per the community and religion based laws. 

The Indian Succession Act applies for all testamentary succession for Hindus, Christians, Sikhs, Jains, Buddhists and Parsis where an individual, irrespective of gender, inherits in absolute any property bequeathed to him or her in a testamentary declaration ( say, a Will ) by any other individual as long as that original bequest is legal and not in contravention of any applicable laws. 

For non-testamentary succession ( i.e say a parent has died without a Will, aka Intestate ) multiple Personal (community) laws guide the rights of a woman with regard to inheritance. Thus, there are specific provisions applicable under the Hindu Succession Act, 2005, the Muslim Personal Law Application Act, 1937 and the Special Marriages Act, 1954 etc. that would guide the succession of assets and properties depending on gender, marital status and parental and/or spousal position. Sadly, many of these are biased against women though attempts are being made to amend these over time. These can be best determined on a case-to-case basis under proper legal advise. 

Soubir: Indian Succession Act does not discriminate succession based on gender. It was originally designed for the British subjects in pre-Independence India and was largely applicable to Christians and Jews. Today, it is applicable in all cases of Testamentary Succession.

Soubir: Sadly, there exists gender bias in most community succession laws. When there is no Testamentary declaration(Will), women may face restriction from the applicability of community laws. In such cases, they can seek remedy with the help of a lawyer against the party declining her legal inheritance in a civil suit for partition of assets. In most cases, a well written Will is a good means of transmission of inheritance. However it is not a guarantee that the Will too will not get contested. 

A few steps that can help women protect their inheritance - Get an attested copy of Death Certificates of the benefactor ( say a parent );get a probate of a Will if it exists ; get a succession certificate for movable properties ( bank accounts etc ) if you do not know of existence of Wills or Nominations ; inform Banks, Fund Houses, Fund Registrars of the death of the account holder immediately along with a copy of the Death Certificate; in case you apprehend possible denial of inheritance, file an injunction in an appropriate court to prevent others from starting any proceeding that may deny you your share.

Soubir: Direct gifting of the asset is an option. If it is a self-acquired asset and one is the sole possessor of it, they have the complete right to gift it in their lifetime. This can be done by drawing up a gift deed. An alternative would be to form a Beneficiary Trust with explicit custody of the assets and with instructions to the advantage of the eventual beneficiary.

A Trust can, for example, be instructed bear the living expenses of the beneficiary, or pay for her education, or marriage or transfer assets on attainment of majority of age etc. A Trust can also be dissolved, per instructions, once the objective is achieved. Trustees are to be appointed to ensure that the trust meets its objectives. 

Thus, forming a trust is a safer route but involves additional steps and is more expensive. 

Sejal: Due to social structures and pressures in India, women tend to get conflicted between spouse, sons and daughters. They also come under pressure with regard to non-family members including social and charitable causes. The law allows a woman to bequeath her self-acquired assets in any way she wishes. However, as mentioned, certain communities have personal laws that, when applicable, may impose certain restrictions. 

In general, the common pitfalls we have seen in succession planning are : Delaying / avoiding the creation of a will or seeking ‘approval’ from family members ; Predominantly including spouse and sons, but ignoring daughters in their wills; or excluding married daughters specifically ; Failing to evaluate other mechanisms like Trusts and Gifts as means of assured transmission of assets ; Failing to provide for situations like incapacitation, End-of-Life instructions, mirroring wills with spouse of significant other and failing to Register a Will at inception and at every modification. This is not mandatory but in case of disputes, serves as the proof of authenticity for successors. Seeking qualified legal advice can help solve most of these challenges.