Division of property after the death of a family member who leaves behind assets can become a messy affair, whether or not that person leaves behind a written Will. The entire process becomes even more tedious when multiple heirs are involved. This article in no way claims to make any of that easy for you but being informed never hurts.
These 10 points are everything you need to read if you are an expecting heir
1) A Will is nothing but a legal declaration of someone’s intention to distribute his/her property (movable & immovable) in a certain way among his/her legal heirs or just about anyone he/she wishes to. In an ideal scenario, this eliminates the chances of any sort of dispute among beneficiaries.
2) But, a Will doesn’t become operational automatically on the death of the person. The beneficiary will have to obtain a probate from the court. (Learn more about probating a Will- link the article on Writing A Will here)
3) In case a person dies intestate (without leaving behind a Will), the succession of property takes place according to Hindu, Muslim or Indian Succession Act. Anyone who is not a Muslim, Christian or Parsi is governed by Hindu Succession Act, 1952. While Muslims distribute their property according to Shariat Law, the Indian Succession Act, 1925 applies to everyone who falls outside the realm of both these laws. Simple.
4) The Hindu Succession Act which covers over 80% of India’s total population says that if a Hindu male dies intestate, the property is first passed on to Class I heirs, which include his widow, children (both son and daughter) and mother, in equal share. In case the person doesn’t leave behind anyone from this category of heirs, then Class II heirs which include his father, grandchildren, siblings and other relatives, as specified in the law can claim their right to property. And in the absence of both Class I and II heirs, the property goes to agnates (relatives through male ancestor) and then to cognates (relatives through female ancestor).
5) Staying with the Hindu Law of Succession. In case the property is in the name of deceased woman, her husband and children become equal shareholders. But if none of them are present, the property can be claimed by her husband’s heirs and not hers. So much for equality!
6) In the above mentioned cases, the distribution can be either decided mutually or can be settled by the court.
7) Remember, not just assets, you inherit the liabilities too so make sure you clear all outstanding debts using the assets before any money is distributed among family members.
8) Once all this done, you need to apply for mutation of the property’s title (link article- How to go for mutation of property) in the concerned municipal department. Mutation helps in updating the property records. And you have to do this within six months of the death.
9) If there are multiple heirs, but only one person applies for mutation in his name, he/she will have to produce a no-objection certificate (NOC) from others.
10) Currently, there is no inheritance tax in India. So whatever you inherit is virtually tax-free, however, income tax is levied on the income arising from such inherited assets. Also, you will have to pay Capital Gains Tax in case you decide to sell this property.
A good lawyer, hopefully, will make the entire process much simpler for you.