What do women need to know about inheritance? Why do people shy away from talking about it? What is the importance of a will?
Listen to this week's Big Decisions podcast with Alex Mathew and Khaitan & Co's Bijal Ajinkya.
#inheritance #inheritancetax #bigdecisions
Listen to this week's Big Decisions podcast with Alex Mathew and Khaitan & Co's Bijal Ajinkya.
#inheritance #inheritancetax #bigdecisions
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TVTranscript
00:00Inheritance, it is a word that is deeply complicated and not just that, it's also a topic that
00:13is uncomfortable to talk about.
00:15And that's probably because we're uncomfortable with the idea of our own mortality.
00:20And for those that are inheriting, we're uncomfortable with the idea that our parents may not be
00:25with us, will not be with us forever.
00:28I'm Alex Mathew and this is Big Decisions on NDTV Profit.
00:33And on today's episode, we're going to talk about this very key issue.
00:38But we're going to focus on the rights of the woman.
00:42Because in conversations that we've had leading up to this episode, we've discovered some
00:45deeply troubling stories.
00:48In fact, we spoke to a few young women and these are some of the things that they had to say.
00:54So I'm very well aware about the inheritance law, but I don't think any of my dad's property
00:59will come to me because that's exactly how it has been happening over the years.
01:04My mom never asked for it, my mom never asked for it.
01:08So ultimately, it's like a thing that my dad's property goes to your brother.
01:12My father had passed away a few years ago and my extended family is thinking of selling
01:17off our ancestral land.
01:19My uncle, from my father's side, pointed out to me that since I'm a daughter, I don't have
01:23a right to share in the ancestral property, like my brother does.
01:27My father tried to ensure my financial security by making a will, but because there wasn't
01:33really any proper phrasing of the will due to inadequate assistance, there were a lot
01:38of dual conditions and it led to a lot of the will's condition being declared void in
01:44the court.
01:45So most of the assets went to my brother.
01:48So I have a brother, we're two siblings, and my brother and his wife used to live with
01:53our parents in our ancestral home.
01:56Now both my parents have passed and I have been wanting to move back to my ancestral
02:02home or at least visit, but my brother and his wife will not allow it because they say
02:07that since it's an ancestral home, it doesn't belong to me.
02:11I don't inherit it and I don't know if I can even challenge it.
02:15I'd like to break this up into two parts.
02:17In the first part, we'll talk about the legal rights of the inheritor with a focus on the
02:22woman.
02:23And in the second part, we'll talk to you about what you need to know from the financial
02:27planning perspective.
02:29Joining me now is Bijal Ajinkya, partner at Khaitan & Co.
02:33Bijal, thanks so much for taking the time.
02:35Most welcome.
02:37Why is this such a complicated, troublesome, uncomfortable conversation?
02:42So I would say that you have the law on one side, which I would say is extremely progressive.
02:48And our law has always provided for rights for a woman, be it you a daughter, a wife,
02:55or for that matter, a mother.
02:57However, from a societal perspective, a daughter or a woman is always seen as someone that,
03:04you know, as we've always said, paraya, so you know, after she's married, you know, she
03:08belongs to the husband's family.
03:10And to that extent, from a legacy perspective, it is always the son who's actually going
03:15to take over.
03:17And I would say that it's interesting that Indian families, more often than not, they
03:22somewhere believe that from a philosophical as well as a spiritual perspective, talking
03:27about death is something which is like really bad.
03:31And even as, you know, even for the inheritor, really to talk about, you know, their parents
03:36not really being there or the in-laws not really being there becomes a very tricky situation.
03:41Because what are you implying?
03:42Absolutely.
03:43Are you implying that, you know, you are, you know, I want something or are you really
03:48looking at a situation wherein like, you know, you know, you are ready to actually move on.
03:54So it becomes a very tricky conversation.
03:56However, it's interesting to really see that the law has been progressive.
04:01And to that extent, it's only wherein the society on the whole needs to be progressive.
04:06And really knowing women's rights is an important situation.
04:09So let's talk about the law and let's talk about how it treats men and women.
04:14Is there a difference in the eyes of the law between a man and a woman when it comes to
04:19inheritance?
04:20So I would say that, you know, when you're looking at a daughter or a son, right, for
04:26that matter, you look at the Hindu Succession Act, we look at the Indian Succession Act,
04:31they've all always provided for the son and the daughter to actually take in equally.
04:37It was only in the year 2005, we saw the ancestral or co-pastnary property, wherein a daughter
04:44was considered an equal co-pastner to a son.
04:48Can you explain this in very simple terms, we're talking about ancestral property, would
04:52that be something that not your father, but your grandfather or someone before him, or
04:59your grandmother and that, basically, your father's or your mother's parents built something
05:06and it passed on and that becomes ancestral.
05:08Absolutely.
05:09So, you know, when you're looking at a situation like in India, it's very common to do joint
05:13businesses as a family unit as a whole.
05:16So you don't really look at that, okay, this is my brother, this is my sister.
05:20And you've had situations in grandparents generation, you know, between the, you know,
05:25three or four brothers, you know, they would be doing a joint business.
05:29And there was never really a demarcation as to whether this asset which you have invested
05:34really belongs to you.
05:36It was all considered as one unit in itself, you never saw like your brother as a different
05:40family.
05:41And to that extent, something like that, which is passing on through generations, is considered
05:46as joint family property, or for that matter, ancestral property.
05:50Okay, so it's not just a building, it can be assets, it can be anything, it could be
05:55business, it could be a building, you know, currently, given the fact that there is so
05:59much of, you know, old constructions really coming down and new ones really coming up,
06:04you do see a number of legal documents seeing the rounds, because today, no builder wants
06:10to pick up a building, which has actually a family dispute sitting within it.
06:14Right.
06:15So to that extent, you would be taking the approval of all the co-parceners.
06:19And now with the change in law...
06:20How do you define a co-par...
06:21So just of course, this is a legal term that is used, but how do you describe a co-parcener?
06:26What is that?
06:27So a co-parcener is a person who belongs to a family, it's of course more dealt with in
06:31Hindu law.
06:32And to that extent, if at all your father could, you know, either set up a property
06:38and call it as a joint Hindu family property, and in which case, post 2005, the daughter
06:44and the son actually taken equally.
06:47If it was prior to 2005, it was different.
06:50However, with the Supreme Court decision, irrespective of when the co-parcenary property
06:55was set up, so long as the father or the grandfather decided that this is now a common hodgepodge
07:01to be meant for the benefit of the entire family in itself, to that extent, it is considered
07:06as co-parcenary property.
07:07Okay, so what that means is that even if, and suppose, let me give you a hypothetical
07:13situation, it's me and my sister, and my father has decided that this ancestral property he
07:17wants to distribute or he wants to give through a will to his son.
07:22It can be challenged by my sister because the law states that she should have an equal
07:30share.
07:31That is correct.
07:32Okay.
07:33That is correct.
07:34And which is where you are seeing a lot of situations where families, because they want
07:37to be extremely clear on succession, and obviously in a situation where both son and daughter
07:42are married and they do have their own families, it becomes very difficult, if at all, that
07:47particular co-parcenary is actually running a business, right?
07:52So to that extent, we are seeing a number of situations where families are looking at
07:56a partition of these Hindu undivided family.
07:59So you are partitioning it out and not necessarily from the perspective that you don't want your
08:05daughter to actually benefit.
08:07It's more from the perspective of bringing in that clarity vis-a-vis what the son and
08:11what the daughter are really inheriting.
08:13Is this only with Hindu undivided family or is this with all ancestral property?
08:19So I would say that it is more vis-a-vis Hindu properties because the entire concept of ancestral
08:25property is coming in under the Hindu law itself.
08:28Is there any distinction that you would need to pay attention to in the Hindu law vis-a-vis
08:36the common law?
08:37Is that right?
08:38Am I saying the right word?
08:39Is it common law?
08:40Okay.
08:41So in India, we don't have a uniform civil code so far.
08:43So we don't have one law which applies across India.
08:47The law which we have in India essentially depends on the personal law which you really
08:51belong to.
08:52So if you are of the Hindu faith, you do belong to the, you know, your succession will be
08:56as per Hindu succession law.
08:58If you are a Parsi, as per Parsi succession law.
09:01If you are, say, a Christian under the Indian Succession Act and so on and so forth.
09:05So it really depends which sect you really belong to.
09:09Of course, there is a move to actually bring in a uniform civil code but I think that's
09:14a question of time.
09:15It's a question of time.
09:16Let's talk about issues that you have come across and of course, we've laid out some
09:20of those aspects and I think you pointed out a very important part at the start which is
09:26that the law provides a certain set of rules but then society looks at these things differently.
09:31I'm sure over the course of your career, you've come up with or you've come across several
09:36instances that will help us, help our listeners and viewers understand this concept of inheritance.
09:43What according to you is the most startling case that you've come across?
09:48Well, I would say, I mean, many and of course, it really depends on, you know, it really
09:55differs from family to family.
09:58If we're looking at, you know, daughter's rights in itself, we've seen situations where
10:03let's assume, you know, the daughter is living in India and the, you know, son is outside
10:10of India and perhaps the daughter is the one who's really looking after the parents in
10:14itself, you know, I mean, may not be necessarily living with them.
10:18We've seen situations where the daughter's actually moved all the assets to her name
10:23leaving actually her son high and dry.
10:25I mean, her brother high and dry, right?
10:27So you've seen both of those situations.
10:30And I would also say cases wherein, you know, especially in a joint business, wherein you
10:35do have a larger family in the mix, in a situation where, and this would be more important in
10:42business families, like if the wife is not really a working person in the family business,
10:48she may really be looking after the home and really building up the personal family in
10:52itself, which is a very, very important job.
10:56And in a situation where let's assume her husband passes, then in that case, often we've
11:03seen situations where the wife is absolutely clueless of the family assets in itself.
11:10And to that extent, extremely important for families to really consider, you know, creating
11:15a register of assets and liabilities, because we've often known, you know, some creditors
11:20who are absolutely, you know, unaware to the family in itself, really pop up when
11:25somebody passes away.
11:26So to that extent, whether it's a business family and creating some level of, you know,
11:33asset base for the spouse becomes extremely important.
11:37When you're looking at, you know, daughters in itself, very important to consider that,
11:42you know, it could be a situation wherein the daughter feels uncomfortable really asking
11:47about it. Not necessarily she is in the best of financial position herself, but she just
11:52feels, you know, an emotional bond to her family, wherein she feels that if I ask this
11:58question, you know, is there going to be a second guess about my real intentions?
12:03However, I would say that most families today are really looking at it clearly, getting
12:09their children, you know, on the table, explaining to them what their real wishes are.
12:14And to that extent, really looking at a division of assets, which really best suits the family
12:19needs.
12:19There are a few cases that we came across, anecdotal cases that are quite troubling to say
12:25the very least. And I'd like to ask Bijal about how to deal with certain situations like
12:30this, because I think that they would be representative of cases that a lot of other
12:35people might be facing.
12:36So Bijal, I'd like to start with the first one, which is that there is no will that was
12:43made. The parents have passed, but the brother and his wife are living in a property.
12:51The sister is not allowed to enter and she does not know whether she has a right to that
12:57property. How does one deal with a situation like this?
13:00Sure. So one, I would say that given the fact that the parents passed without a will, most
13:07important to note that the sister does have an equal right as the son in the property.
13:14Now, it is very common that, you know, you may not actually have a will.
13:18However, what is important to note that for the transition of assets or the transmission
13:24of assets from the parent's name to the child's name, even if at all it is the son, they
13:30would require a, you know, a letter of administration or a succession certificate from the
13:35court. Now, when you apply to the court for a succession certificate, all the letters of
13:40administration, it is extremely important for the person who's actually making the
13:45application to get a no objection from the heirs of the parent.
13:50Right. And these are heirs who are heirs under succession laws.
13:53So it doesn't matter even if they had a will and they had actually put in someone's name.
13:57Let's assume they had put in the son's name.
13:59Even then, the daughter actually has, you know, needs to be asked for a no objection to go
14:05ahead with the execution procedure.
14:07Even if there's a will.
14:08Even if there is a will.
14:10Now, that is her first point in call where she can essentially say that I object.
14:17I really want to actually see the will or if there is no will, if you claim that there is no
14:23will, then in that situation under law, we both inherit in equal proportions.
14:27Right. But in several cases, I would assume that people simply don't go for that process in
14:34court and they continue to live in a property.
14:36In that situation, what is the recourse?
14:38I would say in that situation, the most common recourse to really undertake is the fact of
14:44you actually going to the society and filing a letter there to essentially say that, look, we
14:50are equal owners and I would also like to assert my right.
14:56If at all the sister would like to, she can actually go to the courts in a petition to say
15:02that I would like to also live there and I want a partition of this particular property to be
15:06undertaken. But it's a complicated situation.
15:09I would say it's definitely complicated, but it does get her brother to actually come down on the
15:15table and negotiate it as such, because the easiest thing for the sister to really get is an
15:20interim order from a court.
15:22That's not really difficult.
15:23And in which case the brother could be asked that, OK, we are going to keep it status quo, but
15:28you will not be allowed to live in the property, which is the worst which they could really get.
15:32Right. Yeah. So in most situations and I think what is important here is for the daughter to be
15:38aware of what the properties are.
15:40Sure. Now, she may just be aware of this real estate.
15:44Now, it's important for her to know as to whether the real estate has actually been gifted by the
15:49parents to the son in their lifetime.
15:51If it has, then, of course, there is nothing which she can really do about it unless, of course, she
15:57can challenge the fact that this gift was made under a duress.
16:01OK, but it would require a lot actually to be seen as evidence.
16:05Because how do you really prove that somebody is forced?
16:08So unless there are letters to really show that, you know, my parents are mistreating me, you know,
16:12your parents are mistreating me, but I don't have a choice but to live with your brother, etc.
16:16Unless there is something like that, it does become extremely tricky.
16:19OK, but post the fact you can, you have legal recourse and we've discussed that.
16:24The other one has to do with ancestral land, in which case the uncle is saying, you know, as a
16:32daughter, you do not have access or you do not have rights to ancestral property.
16:37That is patently false.
16:39Absolutely. Given the fact that her father would have been a part of that particular ancestral
16:46wealth, a daughter takes equally as the son from the share of her father itself.
16:54So to that extent, the share of Indian ancestral property, which the father may have inherited
17:00himself, right, because from his father or his own grandfather, the daughter herself does have an
17:06inherent right in it.
17:08Now, of course, you know, in a situation where that particular property is going in for a
17:12redevelopment, etc., very important to note that the daughter's signatures would be required to be
17:19actually taken before the hammer is actually put on the building.
17:22Again, a no objection certificate.
17:24But in that case, even if there's a no objection certificate, she would still have a right to the
17:29developed property.
17:30So it really depends on how she really, how that particular agreement for redevelopment is
17:35undertaken. So more often than not, it's really a no objection come a family settlement, in which
17:41case she does need to read the fine print to understand as to what she's giving up and what she's
17:47getting in return. Is it better to seek legal help in these situations?
17:50Definitely, definitely, because more often than not, that these documents are a little
17:55complicated. And if she is really giving her no objection, the question is, what is she really
18:01getting in return? If she says it's for nil consideration, right, which is where I don't want anything, then
18:07she's totally out. But if at all, it's a situation, you know, you will often see situations where they will
18:12actually pay her an amount and say that now in the redeveloped building, we are going to be getting X
18:19number of flats. And in those X number of flats, only these particular family members have a right.
18:25Now, that's all put up in that particular agreement in the family settlement itself.
18:29So it's important, you know, for her to read the fine print.
18:32Okay. The third case that I want to discuss is the absence of a will. And this is slightly
18:38complicated because what was pointed out is that the parents were split, but they were not divorced.
18:45The mother passed, the flat was in the name of the mother. And the daughter does not know what her rights
18:52are in this situation. My interpretation as a lay person is that both the father as well as the daughter
18:59had right to the property. So how do you how do you proceed with that?
19:03Yes. So I would say here, you know, given the fact that the parents are separated, and they are not
19:08really divorced, when a woman passes away, under most laws, the husband as well as the children
19:17inherit. Now, there may be differences in the ratio of distribution, depending on the law, which
19:22that you know, the woman is actually subjected to.
19:25Can you can you explain why that is? Or what the nuances of that are?
19:29Yeah. So as an example, if you're looking at, say, a Hindu law, or if we are looking at the Indian
19:34Succession Act, in that case, the husband and the children, they all inherit in the woman's property
19:40in equal proportion. Okay. If we are looking at the Islamic law on succession, the Sharia law, then in
19:47that situation, there are variant grades, because it's a very interesting law wherein they're
19:52providing for the larger family itself. Okay. So you know, the mother, her parents, or her husband,
19:59the, you know, her children, children's children, each of them get a particular share. So it's not
20:04really equal, but they do have a specific ratio. So depending on whatever, you know, religious faith,
20:11the mother really belong to that would really, you know, take care of a succession. However, having
20:17said that, the fact is that the daughter, as well as the husband, in spite of him being separated, they
20:24both have an entitlement in the absence of her having a will. And the question is that, how does she
20:30really know the assets? And that's something for her to really understand the assets which were
20:35there, you know, looking at her last balance sheet file, you know, you have income tax returns, which
20:40are really filed, or of course, you know, the family accountant or well wisher, who's actually kept a
20:45list of those assets. Okay, how important is a will, in the situations that you have seen, one would
20:52think that it's of paramount importance, right? How complicated is it, if you don't have a will, in your
21:00experience? Okay. So it's very interesting to really see that when you have a will, you have a way, right?
21:07Right. So whether it's a contest, or it's a pure succession. Now, in a situation where you have a
21:14will, I think the beauty really is that you very clearly carved out the succession vis-a-vis each of your
21:22inheritors. When you don't really have a will, it's going by the succession law. And to that extent,
21:29irrespective of what the asset is, it's just going to be divided amongst the inheritors. Now, let us take an
21:36example of a home, right? You don't want a situation wherein you have like a married son, a married daughter, you
21:45know, the wife or living in, you know, having a claim on that particular property. So the beauty of a will is that
21:51you can very clearly carve out that, okay, this particular property, I would like it to be for my wife, or to be, you
21:58know, after my wife, maybe for my children in equal proportions, I may want them to sell the property, so that you
22:03know, there is no dispute, because finally, what is it which your family wants, right? You're not really looking at
22:08passing on wealth, you're really looking at passing on a legacy of value. And to that extent, if you do want your son and
22:16daughter to actually, you know, have that relationship, post the parent's lifetime, very, very important for there to be
22:23absolute clarity on the distribution of assets.
22:27Let's talk about the last aspect, which is once a will has been received, and you're trying to execute this, I've heard,
22:34again, anecdotal evidence that this can also be a painful process that getting the probate, is that what it's called? From the
22:42court? So that is the approval of the court? That's good. It can be time consuming.
22:46Yeah, so it can be time consuming of around, you know, six months, six to nine months. And of course, we are assuming it's a
22:53situation of no contest by the real heirs under, you know, succession laws, or it could be a situation that you've taken a
23:00will to a court, but the person who's deceased, who's called a testator, he's actually written a subsequent will, right? So the
23:08reason of a probate is really giving a stamp of authority that yes, this is the final will of that particular deceased, and it's
23:16ready for an execution. Now, whichever way we really look at it, whether you have a will, you will go in for a probate, if you don't
23:24have a will, then in that situation, like if the person who's passed away, has lived in say, Bombay, Calcutta, or Chennai, these are
23:33the presidential towns, and a succession certificate, or, you know, letters of administration is compulsory in these particular, you
23:43know, jurisdictions for the transmission of assets. If you are living in a place outside of these three presidential towns, then in that
23:51situation, if the value of the property is high, then any of those, like if it's the shares of a company or a society's, you know, where
24:00apartment which we are transmitting, they for their own good housekeeping, will actually want you to approach, say, the Delhi High
24:07Court or whichever, in order to actually ensure that there is no dispute and the company or the society is not dragged into a family
24:16dispute.
24:16Fair point. You know, I think we've dealt into a lot of very important subjects today. But at the same time, because this is such a
24:24complicated issue, Bijal, I'm sure that people will have questions. So what I will say is that though this conversation is very
24:31important and lovely conversation has drawn to a close. If my viewers and listeners have questions, they can send them to us on any one of our
24:39social media platforms. And we'll try and get Bijal to answer them at a later date. Bijal, thank you so much for taking the time.
24:46Thank you.
24:47It's been an absolute pleasure bringing you this episode of Big Decisions. Like I said, if you've got questions for us, send them to us on any
24:53one of our social media platforms and do stay tuned. We'll be bringing you a lot more content just like this over the course of the coming
25:00weeks. This is NDTV Profit.