A Settlement Deed Instead Of A Will


wealthymattersSuppose a person who owns a house, acquired out of his/her own earnings and wants to leave it to one or more of his/her children after the death of  themselves and their spouse,to the exclusion of other children, he /she has the option of executing a will or making a settlement retaining life interest. The execution of a will has its own hassles in identifying a reliable person to be the executor and involves expenses too. The will might also have  to be probated , the probate of a will is mandatory for the properties situated at Chennai, Mumbai and Kolkatta,for which court fee is to be paid.

The better option in this case would be to execute a settlement deed in favour of the children he/she wishes to leave the property to. The person can retain the life interest of residing and letting out the said property for rents and enjoying the rental benefits and other profits accruing there from during his/her life time along with the spouse. In the event of the spouse surviving after the person’s life time, the said property will devolve on the surviving spouse and he/she will be at liberty to retain the life interest of residing and enjoying the said property during their life time by letting it out for rents and receiving the rental and other benefits without having any right to alienate, encumber, and mortgage.

There are concessional rates of stamp duty and registration for settlement deeds for family members. The family members include father, mother, husband, wife, son, daughter and grand child.

 

Gift Deed Or Relinquishment Deed?


wealthymattersWhen it comes to transferring property, a sales deed may not always fit the bill, especially if you want to pass it on to relatives. In such cases, instruments like a gift deed or relinquishment deed can come to your rescue. However, blindly choosing either can lead to problems.You must understand the purpose of each document before getting it drafted. Know the benefits as well as drawbacks of each.

Gift deed

This document allows you to gift your assets or transfer ownership without any exchange of money. To gift immovable property, you just have to draft the document on a stamp paper, have it attested by two witnesses and register it. Registering a gift deed with the sub-registrar of assurances is mandatory as per Section 17 of the Registration Act, 1908, failing which the transfer will be invalid. Besides, such a transfer is irrevocable. Once the property is gifted, it belongs to the beneficiary and you cannot reverse the transfer or even ask for monetary compensation.

However, if you want to gift movable property like jewellery, registration is not compulsory. At the same time, a mere entry in an account book is not sufficient to establish a transfer. Apart from physically handing over the property, you need to back it with a gift deed. The process is slightly different if you are gifting company shares. You have to fill out the share transfer form and submit it to the company or registrar, and the transfer agent of the firm. Once again, get a gift deed drawn and executed to complete the transfer, but the document need not be registered. Read more of this post

Protecting The Family Businesses And Wealth


wealthymatters

For business families succession planning is important to ensure the continuity and growth of  business and  protection of  the economic interests of all family members.Family business owners are concerned about the interests of their spouses post their demise, disputes among siblings over the wealth and the leakage of the family’s wealth as a result of litigious divorces or family fights.Then there are concerns about ring fencing assets from litigation and confiscation.Sheltering from taxes is another common concern.

Both the objectives of ensuring the continuity and growth of  business and  protecting  the economic interests of all family members could be conflicting at times.Protection of the economic interests of all the family members often results in the distribution of wealth because it may  involve each  family member directly holding shares of the company.This may prove detrimental to the interests of the business for various reasons.One of them is that all the family members may not be inclined to run the business.Another reason is that one of the family members owning a significant stake may dispose off his/her holding to an external party,thus leading to loss of control over the company.Since all the family members are not inclined to run the business on a day-to-day basis,it would be essential to split the management and operating roles from the ownership,which entails a fresh challenge.The business owner might want to give exactly equal number of shares to everyone,but those who work in the business may feel they are entitled to more.Likewise,those who don;t work in the business may feel the same way about their own shares.After all,they may reason, they’re not drawing salaries,so they should get a bigger share of dividends and profit-sharing. Read more of this post

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