Everyone, not only the affluent, has a lot to share with their family members especially when it comes to leaving their legacy behind. The wealth inherited and earned over their lifetime is their gift for future generations. Most people do not think about leaving this world before they have made a mark and set aside something for everyone close to them.
But one thing that the past two years have reminded us is the age-old wisdom that life is ephemeral, and you must be prepared for the worst at all times.
Being prepared does not mean living in fear or anxiety. It simply means that you must have a plan B and possibly a plan C if things don’t go your way. Moreover, you must include your closest confidants (family members) in your plans – at least they must know where to find your plans.
One such plan is your will or a succession plan.
If you run a business, then succession planning could involve many things – from voting rights to management control. But today we will discuss the simplest of such plans sharing your legacy with your heirs.
With a will, you can solve a unique problem faced by people with wealth – distributing it among family members, close friends, and causes you care for.
It is common to see a rift in families when dividing the family wealth among siblings – even when the head of the family is doing it in her/his lifetime. Therefore, you could only imagine how big fissures might open after you are not around! (Also Read: What is Estate Planning and why is it important?)
But what happens if someone passes away without leaving a will? We will explore these issues in this article.
Before we move forward let us understand some basic terms.
Legal Heir: Any person who, under the succession laws, is entitled to receive (at least) a part of an intestate person’s property and or their title. The legal heirs are classified as follows:
- Class I: The wife, sons, daughters, and the mother of the deceased are considered their Class I heirs.
- Class II: The father, brothers, and sisters are considered Class II heirs of the deceased. If the father is alive, he has the sole claim over the property of the deceased. The brothers and sisters can stake an equal claim only if the father is not alive.
- Agnates: An “agnate” is a person who is a relative of the deceased from their male family members’ side.
- Cognates: A “cognate” is a person who is a relative of the deceased from their male or female family members’ side.
Succession: Inheritance received by the legal heirs upon the death of a person if the person who died did not make a will.
Will: A written declaration voicing the wishes of a person concerning her/his property and estate.
It may or may not list the properties specifically and may or may not transfer their ownership/usage rights to family members, friends, aides, and others explicitly.
The will provides for the transfer of wealth upon her/his death. It is not necessary to register a will, but a registered will can only be superseded by registering a new will. (Also Read: Role of WILL in estate Planning)
Testate: A person may leave behind a written will to control the distribution of her/his property after their death. Such a succession is called testamentary succession.
Intestate: If a person dies:
- Before leaving a will.
- Without specifying the distribution of specific property in her/his will. Or
- After making an invalid or illegal bequest in the will.
then such a person is said to have died intestate. Intestacy could be total (no will at all) or partial (no specific instruction about some properties in the written will).
If you think that when you pass away, your immediate dependents will get you property and wealth, then you can be both right and wrong.
For intestate deaths, the succession laws, according to your religion of birth, will be applied.
The Hindu Succession Law of 1925 (amended in 2005) applies to Hindus, Jains, Sikhs, and Buddhists. The Muslim Personal Law 1937 covers the succession among Muslims. The Indian Succession Act 1925 has special provisions for succession among Christians, Parsis, and other communities.
In this article, we would be specifically deal with intestate succession under Hindu Law. The treatment of intestate property under the Hindu Succession Law depends on the type of property.
Intestate Succession under Hindu Laws: Joint or Family Property
If you are covered by the Hindu Succession Law and live in West Bengal, Orissa, or Assam, then the succession of your property is governed by the Dayabhaga rules.
Under it, the male heirs do not become the owner of the joint family property until after the death of their father.
If you live in other parts of India, then the Mitakshara rules govern succession. Under it, the male heirs become co-owners (co-parceners) of the joint family property with birth.
Though, the overall control and management of the property remain with the eldest male member of the family or Karta.
After the Hindu Succession Act of 1925, these ancient laws are of significance only in determining the order of claim of legal heirs in an intestate succession in India. The 2005 amendment to the Hindu Succession Act gave the female members (wives, daughters, and daughters-in-law) the same status as their male counterparts.
When a co-parcener dies, their share in the joint family property is passed to their legal heirs as follows:
- The family property is divided amongst the deceased and their legal heirs equally. Legal heirs are their spouse, their children, and their parents.
- The share of the deceased family member is now considered their self-acquired property. The self-acquired property of the deceased is distributed among their legal heirs according to the succession law.
The succession rules for self-acquired property vary depending on the gender of the deceased.
Self-Acquired Property of Male
In the case of deceased male Hindu, the four categories – class I, class II, agnates, and cognates – of legal heirs can stake their claims, in that order, if and only if there are no heirs in the class preceding them.
So, the order of intestate succession in India would be:
- If any Class I heir exist, they will get the self-acquired property of the deceased in equal parts.
- If no Class I heir exists, then the father who is a Class II heir will get the entire self-acquired property of the deceased. If the father of the deceased is no more, then other class II heirs will share the property equally.
- If neither class I nor class II heirs exist, then the self-acquired property of the deceased would be distributed equally among the agnates.
- Finally, if heirs from none of the above classes exist, then cognates would equally share the self-acquired property of the deceased.
Self-Acquired Property of Female
Now we will talk about what the law says regarding succession to a Hindu Female dying intestate. The 2005 amendment gave the female members of the family equal rights to inherit the family property.
She is considered to be the absolute owner of her property – self-acquired, inherited, or received as gifts – as it is considered the Stri-Dhana.
In case of the death of a female member, her Stri-Dhana is distributed according to the following order, in case of intestate succession. The heir(s) in a subsequent position is considered only if there is no legal heir in a given position.
- Her husband and children, equally.
- Her grandchildren, only if children are not alive.
- In the case of an unmarried daughter, her parents.
- In the absence of all of the above, the rules for the self-acquired property for males will apply and class I, class II, agnates, and cognates are considered in that order.
Also check- How Private Trusts can help in estate planning?
Provisions Applicable to All Cases
- Rights of an Unborn Child: A child in the womb has the same rights as any other family member. Therefore, while diving the property, a pregnant woman and her unborn child are considered two members.
- Relinquishment of Rights: Any person who does not want a share in the property must relinquish their right explicitly in writing.
- Conversion to Other Religion: For a person to be considered a legal heir, they must be a Hindu at the time of the death of the person whose property they claim to inherit.
- No Benefit from Crime: if someone murders a person to inherit their property, and is convicted of doing so, then they cease to be a legal heir of the deceased. However, their family members would continue to be so if they did not participate or know of the crime.
- Specific Disqualification: If someone is disqualified specifically from inheriting property.
- Disease or Disability: Every family member – diseased or disabled – has the same rights as others.
- No Legal Heirs: If there are no legal heirs to a property, it is passed on to the government.
- Widow Remarriage: If the widow of the deceased remarries, she will still have her legal heir status. If the widow of the son or the brother of the deceased remarries, she would lose her right as a legal heir.
- Illegitimate Children: Children born out of wedlock are considered only for an intestate succession of their mother’s property, not of their father’s.
Not only property but all the above rules and provisions also apply in the case of distribution of financial assets as well, in the event of intestate succession.
Are You Still Thinking?
The succession laws are archaic and do not reflect the true nature of the relations.
The intestate property is distributed according to the proximity of the blood-relation only.
They also do not have any provisions for donating a part of your estate to causes that you cared for, nor a share to someone you thought was deserving.
Therefore, by making a will you will complete your financial plan and prepare for the time when you are not around. Through a will, you can guide your family members on how to conduct themselves when you are no longer with them.
You are being responsible for planning for financial security as well as harmony amongst your loved ones. (Also Read: How a Will help in securing the financial future of the family?)
Making a will requires admission to oneself of the inevitable. More than a dry piece of paper, a will is an emotional document requiring courage and a clear direction.
While making your will, you would encounter enough twists and turns to confuse you. Your objectivity, love, and impression of a family member will be tested with each sentence. (Also Read: How to write a WILL in India – Step by Step guide)
To make a will, you require someone who has adequate knowledge about your estate and family, and who can guide you in an unbiased manner.
A financial advisor can help you list all properties and financial assets and help you draft a will that meets your desires. They can also help you update the will with each significant change in your family, life, or property.
Please note: We are not legal experts. This article is for informational purposes only. Please consult a legal expert before acting on anything written in the above article.