Estate Planning

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Estate Planning
It deals with law of succession, law relating to Wills, personal laws, registration and transfer of property Most likely you would work in close collaboration with client s solicitor for effective estate planning

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Estate Planning
The Estate Duty Act 1953 was abolished in 1985 Indians can die or inherit wealth tax-less taxEstate planning should be part of your professional advice You can be held professionally liable if you ignore this aspect of planning of your client

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Estate Planning
Areas to be discussed: Need for a properly drafted will grant of probate implication of intestacy Taxation of superannuation and death benefits

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WILL

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Law of Will in Hindu Law

No text available dealing with this subject expressly The seven kinds of documents in use among Hindus, as mentioned in ancient scriptures were documents of Partition, gift, purchase, mortgage, agreement, bondage and debt However, the origin of Will can be traced from the law of gifts

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Law of Will under Mohammadan Law

The ancient texts in Mohammadan Law distinctly deal with the Will. The leading authority on the subject of Wills is HIDAYA (guide), composed by SheikhSheikhBurham-unBurham-un-din Ali in 12th Century. It was transalted to English by Charles Hamilton Another text is the Fatwa-Alamgiri which was Fatwacompiled in 17th century. Both these texts deal with Hanafi Law.

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The reasons for preference to make a will

The testator does not want that the property should devolve in accordance with the intestacy provisions An opportunity to make disposition according to one s own wishes By this debtor can appoint executor and ensure that his estate his administered properly By Will one can appoint testamentary guardian for his infant children

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Legislative Provisions in connection with the Will

According to Hindu Law, a Hindu could make a Will orally or in writing. No attestation was required After enactment of Indian Succession Act 1925, it became compulsory for Hindus to write a will as per the provisions of Section 63 of the Act

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Law of will
The term Will means the legal declaration of the intention of the testator with respect to his property which he desires to be carried into effect after his death The person whose Will has been prepared is called the testator The Will is often called a testamentary document. It is ambulatory until the death of the testator If the words of the Will are rationally capable of two constructions, and one of them results in an intestacy and the other does not, one should prefer to later construction

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Section 2(h) of the Indian Succession Act, 1925 defines will as the legal declaration of the intention of the testator with respect to his property, which he desires to be carried into effect after his death Certain formalities are required to be completed as per law for giving validity to a will

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Law of will
Interpretation if Will:
The intention of the testator will have to be gathered: from the relevant and material contents in the entire Will made in the situation in which the testator was placed in the background of his property, his inclination, wishes, desires and attitude as can be clearly found either from the instrument or from absolutely undoubtedly contemporaneous legally admissible evidence

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A will take effect on the death of the testator During lifetime it is revocable anytime The various choices that a testator has in deciding how to distribute the estate are virtually unlimited However a will should not violate any relevant law

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Characteristics of a will
Legal Declaration:
It means the document must be in conformity with the law

Disposition of Property:
Must relate to the property of the testator Thus appointment of a successor by a mahant is not a will

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Characteristics of a will
To take effect after death of the testator:
Thus a gift during lifetime is a deed of settlement not a will

Revocability:
Section 62 of the Indian Succession Act, 1925, provides that a will is liable to be revoked or altered by its maker at any time when they are competent to dispose their property by will

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Characteristics of a will
Uncertainty:
In accordance with section 59 of India Succession Act,

if a Will or bequeath is not expressive of any definite

intention, it become void for uncertainty The modern doctrine holds that it a will should not be declared void for uncertainty if it is possible to give meaning to it Change of circumstances taking place between date of execution of the Will and date of death may be taken into account by the courts.

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Types of will?
Conditional or contingent will:
It takes effect on the on the occurrence of some contingency or condition IllustrationIllustration- a will to be operative for a particular year, i.e. if I die within that year. If he survives and does not write another will, it would be deemed that he has died intestate

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Joint Will:
A joint Will is a Will made by two or more testators, contained in a single document, duly executed by each of the testator and disposing either of their separate properties , or of their joint properties It operates on the death of each testator If separate properties of two or more persons are disposed of by a single will, then these will be treated as two or more wills and legatees will be entitled to the estate as per the will applicable to them Revocable by either party

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Mutual will:
Two persons conferring on each other reciprocal benefits; thus become both testator and legatee

Concurrent Will:
Two Wills, one relating to property in native country and the other relating to property in foreign country These are totally independent Wills and shall need separate probates

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Holograph will:
In the handwriting of the testator

Sham will:
Writing a will following all formalities but without any intention to transfer the estate with some collateral objectobject- just to induce another person to comply with some wish

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Duplicate will:
These are identical wills for the sake precautions

Privileged will:
A soldier during his engagement in actual warfare may pronounce their will before two witnesses. Such a will is called privileged will

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What is the legal framework of a Will:

A will can be made under Indian Succession Act 1925 or under Hindu Succession Act 1956 (section 30 of the Act). The provisions of the Act apply to Hindu, Buddhists, Sikhs and Jains Muslims are free to make will according to their personal laws ( Muhammadan Law) They may be oral or written and if written, need not be witnessed

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Who can make a will?

As per section 59 of the Indian Succession Act following persons are capable of making a will: Any person of sound mind not being minor A woman who has authority to alienate her property during her lifetime Deaf, dumb and blind persons if they know what they are doing

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Who can make a will?

A person who is ordinary insane, can make during an interval when he is of sound mind No person can make a will when they are in state of mind in which they do not know what they are doing (under intoxication, during illness or some other reason) Corporate bodies cannot make a will

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Immovable and movable property

The power to dispose immovable property depends upon law of situs of the land (Where the property is located) while the power to dispose the movable property depends upon the law of domicile of the testator

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Constraints on the operation of a will:

Will made while of unsound mind, under influence of fraud, intoxication, coercion, undue influence All formalities should be completed to prevent fraud and uncertainty, not completed Inconsistencies

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Who can take property under a will?

Transfer of property under a will is also called bequeathing or bequest of property Any legatee can be bequeathed property including a minor or lunatic An unborn child is capable of taking a bequest so long as it was in the womb at the time of death of the testator

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Who can take property under a will?

If the testator lives longer than the legatee, the will lapses. If there are more than one legatee then the other will get the whole legacy A corporation, a religious deity can also take a bequest A will in favour of a person not in existence at the time of testator s death is void Generally the person receiving the property need not give his assent

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Who can take property under a will?

A testator cannot cut off an heir except by complete
disposition of all his property to other heirs by a will Residual assets cannot be debarred from passing on to all the heirs as per law of succession Where a will imposes an obligation on legatee, the ,llegatee can take nothing unless he accepts it fully

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Structure of a will
It may commence will simple words this is the will of or I ------hereby make this will ------hereby then executor to be appointed a direction made as to estate debts then specific or general gifts to the beneficiaries the will signatures in approved manner of the testator and the witnesses .

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Structure of a will
The executor is given legal responsibility to carry out the instructions given in the will as far as permitted by law He is usually reimbursed of expenses

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Structure of a will
Some are remunerated for their work Sometime there are public trustees to administer the will For large estate it is wise to appoint professional executors ( solicitor, public trustee)

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Drafting of a will
Form of a will
There is no prescribed form for a will The important thing is that it should be properly signed and witnessed It must be initialed by the testator at the end of every page and on all corrections and alterations

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Drafting of a will
Form of a will
People can draft their own will No advocate or solicitor is required But it is always prudent to engage a legally qualified and experienced person for drafting a will to avoid any confusion and complication in future Generally the fee is not expensive A will can be written in any language

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POINTS TO CONSIDER:
Mention name and address of the testator The date and place of execution Fact that the will is being made voluntarily and in sound state of mind Direction as to disposal of body, use of its part for Medical research etc, Appointing guardians for the young children Appointment of executor

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POINTS TO CONSIDER:
Details procedures of making bequests be mentioned A clear definition of the interest conveyed by the will Clear mention of disinheriting a close relative with reasons A residuary clause to ensure that laws of intestate succession do not Intervene

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POINTS TO CONSIDER:
Provision to cover distribution if the nominated beneficiaries dies before the testator A wish statement that my executor may seek advice from Avoidance of conflict with the rule of law Must be attested by at least two witnesses

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Is registration of will compulsory?

 

Registration provides evidence that the

proper parties appeared before the registering officer for attestation

  

In India registration of will is not necessary The registration only evidences genuineness of a will

Once a will is registered, it is placed in the safe custody of the Registrar

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Procedure for registration

The testator must be personally present at the registrar office No fee required EXEMPT PERSONS Persons with infirmity of body Persons in jail No stamp duty/ registration fee required

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Other formal requirements

For immovable property the law of the country of location of the estate to be followed and for immovable property the law of the testator s domicile to be followed

Writing: Writing:
Except a privileged will or a will by a Muslim. All wills must be in writing in any form and language Better to use simple language

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The testator must sign or fix his mark to the will or It must be signed by other in his presence and by his direction Use of pen and ink is not necessary for Stamping of the name of the testator in under his direction is sufficient signing his presence and

a proxy may sign the testator s name in his presence and under his direction

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Attestation by two witnesses:

To The object of attestation is that some person should verify that the will was signed voluntarily The attester or his spouse should not be beneficiary According to section 63 (c) of Indian Succession Act the will must be attested by two or more persons to confirm that they saw the testator sign or affix his mark or any other person sign or fix mark at the direction of the testator Each witness must sign in presence of the testator Each witness must sign at the request of the testator If testator survives the witnesses, it is better to change the will

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Does a will last?

Technically in the absence of a disqualifying event, a will should last

The disqualifying event could be:

Execution of a new will Marriage or divorce of the testator Sufficient change in circumstances Hence a will should be reviewed regularly alongwith the review of taxation issues

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Revocation of wills:
Any time when in sound mind By executing a new will and registering if earlier will was registered Destroying the old will Making a codicil On marriage of a Parsi or a Christian their will stands revoked This does not apply to Hindus, Jain, Sikhs and Buddhists

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To administer the estate of the Probate:

The will generally nominates the executor The probate means a copy of the Will certified under the seal of a competent court with a grant of administration of the estate to the executor of testator If no executor for any reason, court may grant a letter of administration to a legatee The testator must not delegate his testamentary power to other in the will There should be proper distribution of benefits among heirs to avoid potential challenges to a will

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Administration of an Estate:
The executor
Executor means a person to whom the execution of the last will of a deceased person is entrusted by his appointment in the will The probate is granted only to an executor appointed by the will If the executor is appointed court cannot appoint any one else to assist the executor

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The Executor:
The executor is the legal representative of a deceased person, and all the property of the deceased person vests in him The executor also becomes liable for debts and liabilities of the deceased He can represent the testator in legal proceedings The executor needs to apply for probate He is entitled to distribute the assets of the deceased as per his wishes

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The duties of the executor are:

Dispose of the body of the deceased  Prove the will Exhibit in the court an inventory of the assets, credits, debts and liabilities  Consolidate the estate and convert into money if required  Pay the debts Pay to legatees and distribute the residue among the persons entitled all administrative aspects  Exhibit in court an account  His role is voluntary and without reward but can  claim through court or if granted in the will


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Who can be executor?

All persons capable of executing a will can be Executor Who should be appointed executor: A person who will be impartial and fair The testator can appoint one or more executors For large estate responsible persons should be appointed In the event of death of a executor the power will devolve on surviving executors The executor role is of a very special fiduciary nature A probate is not required in the case of wills by Mohammedans

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Executor:
The executor can decline to act It is wise to appoint alternative executors It is best to avoid appointed a person who might have a conflict of interest, say a business partner

Probate:
A probate means a copy of the will certified under the seal of a competent court giving power to the executor to administer and implement the will It is official evidence of an executor s authority

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Letters of Administration (LoA) (LoA)

If a person dies intestate or a will does not name any executor, or if the executor does not want to act as such or is unable to so act, an application can be filed in the courts of law for granting of LoA Under the Indian Succession Act, 1925, a LoA can be granted to any person entitled to the whole (universal legatee) or any part of the estate (residuary legatee) of the deceased person It cannot be granted to a minor, a person of unsound mind, or to association of individuals, unless it is a company LoA cannot be granted till 14 days from the date of the testator s death
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Mohammadan Law of Wills



A Muslim can make an oral Will and writing is not required under Law; but legatees will have to prove beyond doubt the intention of the testator of making the Will If the Will is a written one, intention should be decisive It need not be formally signed by the testator or attested or even registered Will can be made by both males and females

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Mohammadan Law of Wills



The bequest in favour of a heir is not valid unless other heirs give their consent after the death of the testator. Any single person may give consent to bind his own share A Mohammadan cannot by Will dispose of more than one third of the surplus of his estate after payment of funeral expenses and debts. More than one third bequest will need consent of other heirs after death of the testator No Will can be made of life estate with vested remainder

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Mohammadan Law of Wills



In Sunni Law even for 1/3rd consent of other heirs required but not in Shia Law But bequest up to 1/3rd in favour of stranger, consent not required In Sunni Law the legacy lapses if the legatees predecease But in Shial Law it devolves on the legal heirs but if no legal heirs, then lapses

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How the assets pass other than through a will?

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How the assets pass?

Where property is held jointly with another, the nature of relationship between those parties, regarding the property, will determine how that property is dealt with following the death of one of the parties. There are three ways in which property may be held jointly :  Tenant in common  Joint tenancy  Contractual


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TENANT


IN - COMMON

Where two or more persons own the property in such a manner that they have an undivided possession in whole but each with separate ownership in specified share i.e. 50/50; 40/30/30 No one of them is entitled to exclusive possession of any part without the other On death, the tenant-in-common share passes to tenant-inestate of deceased and then to their beneficiaries through grant of probate or letter of administration.

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JOINT TENANT


Where joint tenancy exists the right of survivorship operates When any joint tenant dies , all others, immediately from the moment of death, become owner of deceased interest Assets do not pass to their estate In case of couples, joint tenancy is useful for bank a/c and property.

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OWNERSHIP BY COMPANY


Assets held by company will not pass through estate on death of director or shareholder, but remain in the company Holding asset through capital structure protect the assets of company till the control of company is shifted to another hands. Only shares held by the shareholders pass through their estate on the death of shareholder But assets of company are not safe as in some circumstances the creditors can force the winding up of the enterprises.

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CONTRACT


Another way in which property can be held is contractually. Example is jointly held bank account. If the account is opened as either or survivor , then the surviving account holder gets the entire amount. If the account is not so opened, then it goes through the estate of the deceased. In Nomination the owner names a nominee and after the death of the owner , the assets are handed over/transferred to nominee. The owner is free to set out in their will the distribution of assets

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TRUST


An arrangement by which property is handed over to or vested in a person, to use and dispose it off for the benefit of another. In other words, it implies confidence reposed by one person in another to whom he transfers a property, with an obligation that the income from the trust is to be utilized for the benefit of another and the owner.

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Three types of persons



Author of the trust, the person who reposes or declares the confidence Trustee, the person who accepts the confidence Beneficiary/ies, Beneficiary/ies, the person(s) for whose benefits the confidence is accepted The subject matter of trust is called trust property or trust money

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Three types of persons



The beneficial interest is the right against the trustee The instrument by which the trust is created is called instrument of trust or trust deed The breach of any duty by trustee is called breach of trust

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Why a trust? Why not a company or society?

  

Trust has certain stability in matter of control Trustees can be lifetime trustees which is not possible in case of a company In society there are fairly large number of people and power is diffused in the hands of elected representatives

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Need for a trust

     

Trust can be testamentary: when there is a deed in writing NonNon-testamentary: when there is no deed in writing Types of Trusts Public Private PublicPublic-cum Private Trusts

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TYPES OF TRUST :



1. Public Trusts :
A public trust is one, which benefits the public at large, or some considerable portion of it .

A public trust can be of two types: (a) Public charitable trust (b) Public religious trust

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2. Private Trusts :


In case of private trust, the beneficiaries are individual or families. Private trust are of two types : families. (a) Private specific trust with beneficiaries and shares determinate (b) Private Discretionary trust where the beneficiaries and shares or either is indeterminate Private Trusts are created and governed by Indian Trust Act 1882, whereas charitable trusts are beyond this Act 1882,

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Although Trust Act does not apply to a charitable trust, the three certainties described in section 6 of the Trust Act are necessary for creation of a trust: 1. a declaration of a trust, which is binding on the settler 2. setting apart definite property and divesting of the ownership thereof 3. a statement of objects and beneficiaries

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3. Public cum Private Trusts:



Trust whose part of income may be applied for public purposes and a part may go to a private person or persons Only income applied for public purposes will be exempt as per Income Tax Act if trust created before enactment of Income Tax Act 1961, before 1-4-1962 1-

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Distinction between Private and Public Trusts

1. General in character 2. Benefits for public at large or considerable portion of it 3. Permanent character Individual in character Specific individuals

definite time frame for specific individuals Exemption of tax on income from charitable and religious trusts

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REGISTRATION OF PUBLIC TRUST

Registration of Public Trusts is done either under the Societies Registration Act, 1860 or the local Public Trusts Act, like the Bombay Public Trust Act, 1950
It brings the trust under the supervision and control of the concerned authorities

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A religious or charitable


A religious or charitable trust may not be in writing A religious or charitable trust need not be registered For having Sec 80G benefits a written deed and registration required Always advisable to register

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Requirement for creating a religious trust

  

Precisely designated property Clear object or purpose To disinvest all beneficial interest in the property

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Who can create a TRUST :

Trust may be created:
By a person competent to contract; By or on behalf of a minor with the permission of a court

Beneficiary : In a public trust only the general public can be the beneficiary.

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General Points
      

No trust is defeated for want of trustee An executor of a will may become trustee There may be more than one trustees In Public Trust general public can be beneficiaries A business can also be subject matter of trust Rules under Charitable and Public Trust Act 1920 and Societies Registration Act 1960 be followed A Public Trust can be managed by family members

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TERMINOLOGY


Author of the trust : The person who reposes or declares the confidence Trustee : The person who accepts the confidence Beneficiary : The person for whose benefit the confidence is accepted

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TERMINOLOGY


Trust Property / Trust Money : The subject matter of the trust Beneficial Interest : Interest of the beneficiary is his right against the trustee as owner of the trust property

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The Author of the Trust

     

Must be competent to contract A minor can also create a trust with the permission of the civil court Trustee can be any person capable of holding property Property can be both movable and immovable For immovable property should be in writing or by a will For immovable property, the registration of deed is essential

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Certain Properties cannot be transferred

Chance of receiving property Mere right to sue Public office or salary of a public officer A restricted interest in a property Stipends awarded to armed forces

Beneficiary: Any person capable of holding property can be a

beneficiary
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Disclaimer by Beneficiary: 
A beneficiary can renounce interest by disclaimer addressed to the trustee Nobody is bound to accept a trust, one may disclaim within reasonable time A trust is accepted by any words or acts A disclaimer by a co-trustee may vest the trust in coothers

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Beneficiaries Rights
Rights to rents and profits Rights to specific execution Right to transfer of possession

Beneficiaries, if of one mind, can ask the trustee

to transfer the property to them or to any one else Right to inspect/ transfer beneficial interest/ to sue for execution of trust/ to have proper persons as trustees/rights in case of wrongful purchase by trustees

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Liability of the beneficiaries

Committing breach of trust Taking any undue advantage Concealing some major breach of trust

Rights and powers of trustees

Right to title deeds Right to reimbursement of expenses Right to recoup erroneous payments to beneficiaries Right to apply to court for opinion

General authority of the trustees

To abide by the instructions in the deed To do every reasonable thing to protect the trust property

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DUTIES OF TRUSTEES :
Trustees to execute trust (Sec11) Trustees to protect title to trust property (Sec 13). Trustee not to set up title adverse to beneficiary (Sec 14) Care required from trustee (Sec 15) Trustee to prevent waste (Sec 18) Accounts and information (Sec 19)

Extinction of Trusts
Purpose completed Becomes unlawful Fulfillment of purpose become impossible If revocable, on revocation

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TAX BENEFITS FROM TRUST

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Income from Property held for Charitable and Religious purposes :

  

Created for lawful purpose. Should held for Charitable or Religious purpose. Charitable trust created on or after 1st April 1962 should satisfy additional conditions :


Should not be created for the benefit of any particular religious community or caste. No part of income of such trust should directly or indirectly be for the benefit of the settler or any specified person. Property should wholly be held for charitable purpose.

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Income from property held for charitable and religious purposes :

The trust must get itself registered with the Commissioner of Income Tax within prescribed time. Income of a charitable or religious trust is exempt from tax according to the provisions of section 11, 12, 12 A, 12 AA & 13 If 15% of income is applicable for purposes other than charitable or religious reasons, then 85% income is exempted from tax. If 85% of income is not applied to charitable or religious purposes, the exemption of tax is not provided/available.

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Islamic Law
     

Under Islamic laws Trusts are referred to as Wakfs Theses are inalienable lands or pious endowments Mohammadan Law lays down the purpose for creating a trust Essentials: Has to be a permanent endowment in perpetuity and irrevocable Can be created orally

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Can be created for religious, charity or pious purposes Can be made for rich as well as poor Now registration required Wakfs can be Public, Quasi-Public and Private QuasiAll are subject to the rule of divine property When a wakf becomes instinct, entire property goes to charity

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Dying intestate

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Dying intestate:
No will executed Will has been lost Becomes invalid due to some subsequent events In such cases rule of law will prevail There may be a will for partial property; it will be a case of partial intestacy; probate still be granted to the executor identified in the will. He will also be entrusted to deal with the intestate part

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Intestacy:
In the deceased event of intestacy, the property will be distributed in accordance with the laws of inheritance, based on the religion of the person. The legal heirs will apply to the civil court for the granting of a succession certificate, which will be given as per the law of inheritance

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Intestacy:
The Hindu Succession Act 1956 is applicable to Hindus, Buddhists, Sikhs and Jains and any person who is not a Muslim or Parsi or Christian or Jew Mohammadan Law governs succession to property of Muslims. The provisions of the Indian Succession Act are applicable in all other cases

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Hindu Succession Act, 1956

Rule of Hindu law states that the property which a man inherits from any of his three immediate paternal ancestors namely his father, father s father, father s father s father is ancestral property and his son acquires jointly with him an interest in it by birth.

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Agnates - If two persons are related by blood or adoption, wholly through males. Cognates - If two persons are related by blood or adoption, not wholly through males. Ex. Daughter s Son Full Blood Relationship When both the parents are same, then the children are related to each other by full blood. Half Blood Relationship - When two persons have the same father, but different mother. Uterine Blood Relationship When two persons have same mother but fathers are different.

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Hindu Dying Intestate



The term intestate is defined as : A person is deemed to die intestate in respect of property of which he or she has not made a testamentary disposition capable of taking effect

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Legal heirs under Hindu law are of 2 types :



Class Class

I II

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Section 8 Class I Person to whom property has to develop primarily if person dies intestate. The following are Class - I heirs: Son Daughter Mother Widow Son of predeceased son A Daughter of predeceased son A Widow of predeceased son Affinity Son of predeceased daughter C Daughter of predeceased daughter C Son of predeceased son of predeceased son A Daughter of predeceased son of predeceased son A Widow of predeceased son of predeceased son Affinity

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Class II In absence of Class I heirs class II succeeds and takes the property. The followings are Class II heirs : Father Son s daughter s son; Son s daughter s daughter; brother, sister Daughter s son s son; Daughter s son s daughter; daughter s daughter s son; daughter s daughter s daughter Brother s son; Sister s son; brother s daughter; sister s daughter Father s father; father s mother Father s widow; brother s widow Father s brother; father s sister Mother s father; mother s mother Mother s brother; mother s sister
Imp. : Within Class II, the first entry is given preference over second entry.

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General Rules of Succession in case of a female Hindu: (sec.15 & sec. 16)
a. firstly, upon the sons and daughters (including the children of any pre-deceased son or daughter) and the prehusband taking simultaneously) b. secondly, upon the heirs of the husband c. thirdly upon the mother and father fourthly upon te heirs of the father; and e. lastly upon the heirs of the mother

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Illegitimate Relationship
Any child born outside the lawful wedlock is considered to be illegitimate child of his parents.  Under Act, illegitimate relationship with father is not recognized but it is recognized with mother.


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The property of an intestate shall be divided acc. to following rules :



The intestate widow, or if there are more widow than one, widows together shall take one share. The surviving sons and daughters and the mother of the intestate shall each take one share. Heirs in the branch of each predeceased son or each predeceased daughter of the intestate shall take between them one share.

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Law of succession for property of a Hindu female

   

All properties held by woman should be her absolute properties. The woman s property was classified under two heads: Stridhan Stridhan : It constitute property which woman received by way of gift from her relations. It even include gift received at the time of her marriage.

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Kinds of Woman s Property :

        

Gift and bequests from relation Gift and bequests from non relations Property acquired by self exertion, science and arts Property purchased with the income of stridhan Property acquired under a compromise Property obtained by adverse possession Property obtained in lieu of maintenance Property received inheritance Property obtained on partition

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DWELLING HOUSE


According to Hindu Succession Act, female heir cannot claim the partition of dwelling house until male heirs choose to divide their respective share. The female heir is entitled to right of residence. Daughter shall be entitled to right of residence only if she is unmarried or deserted by / separated from her husband or is a widow.

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Succession under Mohammedan Law

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Succession under Mohammedan Law

The two schools of law governing law of interest are :  Hanafi Law of Inheritance  Shiah Law of Inheritance


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Succession according to Shia Law

      

Spouse always inherit with all classes of heirs (it is a category in itself) Class I Parents Children and other lineal descendants, how low so ever Class II Grandparents, how high so ever Brothers and Sisters and their descendants

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Class

III

Parental uncles and aunts of the deceased and of his parents and grandparents Maternal uncles and aunts of the deceased and of parents and grandparents Distribution of assets would be first among with Class I and in their absence among Class II heirs and in absence of Class I & II among Class III heirs.

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Hanafi Law of Inheritance :

         

The Quaran has introduced some additional heirs apart from customary heirs: Spouse of the deceased by affinity (marriage) Son or son s son (Customary) Daughter or son s daughter or son s son s daughter (Koranik) (Koranik) Grandfather (c) Grandmother (K) Mother (K) Father Consanguine Sisters & Brothers (K) Uterine Brothers & Sisters (K) The new heirs were called as Sharers by Koran and Fyzee called them Koranic Heirs

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 Sharers will get their share first  Whatever is left after allotting shares to sharers, the

residue is divided among the customary heirs. They are called Residuaries . Generally both sharers and residuary will receive simultaneously
 Relations of the deceased who are neither sharers nor

residuaries are termed as Distant Kindreds .

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Transfer of Property

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PROPERTY


Property denotes every kind of interest or right, which has an economic content. Everything tangible or intangible which contribute to the assets of a person would be deemed to be items of property.

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PROPERTY


Tangible items like land, buildings, motorcars etc all have physical existence. Intangible items like powers, rights, goodwill, copyrights, etc which do not have physical existence as in the case of land

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Property can be classified as :

Immovable and movable property  Free hold and lease hold property  Agricultural and Non-Agricultural Property  Commercial and Residential Property etc


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Immovable Property: It means things attached to the earth i.e. Rooted in the earth, as in case of tress and shrubs Imbedded in the earth as in the case of walls or building or Attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached.

1. 2. 3.

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Freehold Property :
land or tenement, which a man holds for term of life, is called freehold. Two qualities required are: Immobility For indeterminate duration The possessor is called freeholder

   

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Leasehold Property :
An estate in land for a term of years is known as leasehold or tenure by way of lease or land held on lease are known as leasehold property.

 

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Covenants in a lease deed/ free-hold property:

Affecting freehold / leasehold land Promise made in deed. They are positive and negative. Positive covenanter imposes an obligation to perform some specific activity and negative covenant requires not to use his land in a specified manner. These are different than conditions, a breach of condition can end lease

 1. 2.

3.

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Covenants by the landlord

Express Implied: quite enjoyment, fitness and repair

Covenants by the tenant

Express Implied: pay rent, pay taxes, not to commit waste

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MUTATION


Mutation is a process whereby a property is transferred from one person s name to another The form and the process by which the property s title can be mutated, can be obtained from the Land of development Authority of the State or Central Government.

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MUTATION
The title to the property should be on the basis of the title owner acquires to the land and not by mutation entries Mutation entries are only for the purpose of collection of revenue from the person who is in possession of the property and not for the purpose to announce the title of owner.

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POWER-OF-ATTORNEY
Power Denotes authority given by one to another to act for him/her or to do certain specified acts.  Attorney It is a person appointed by another to do something for him  POA is in writing under seal authorizing another person who is called Attorney of the person appointing him to do any lawful act instead of another.  POA provides full power and authority of the maker to accomplish the act intended to be performed.


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The POA creates a special power of agency, which entitles the agent to use the principal s name in the transaction entered into, in addition to doing the things on the behalf of the principal.

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Parties to Power

Of - Attorney

Principal/Donor/Grantor : Person granting POA. Agent/Donee/Grantee : Person receiving POA A minor does not have the power to appoint an agent or execute a POA.

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CLASSES OF POWER-OF-ATTORNEY
General Power-of-Attorney : A document which authorizes the Attorney to act generally or in more than one transaction.  Special Power-of-Attorney : A document which authorizes the attorney to act in a single transaction.  Special Power-of-Attorney for Registration : A document of Attorney, which authorizes the attorney to present a document for registration.


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DISTINCTION :
 

Power of Attorney Required to be registered under Indian Registration Act Creates special power of agency which entitles the agent to use it in the court of law Need to be stamped in accordance with Article 48 and Article 52 of Indian Stamp Act

 

Vakalatnama Not required to be registered Document which authorized a legal practitioner to conduct case for a litigant Only a duty is payable in accordance with Section2 Article 10 Schedule II of Court Fees Act.

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Revocation :
The principal has the right to revoke the authority of his agent whenever he likes but has certain exceptions When the agent himself has an interest in the property, which forms part of subject matter of the agency When POA is given for due consideration and forms part of security When the agent has partly exercised the authority.

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