Estate Planning and Management

 

Gift Deed

As the name suggests, this document records property transfer from one person to another without consideration, usually out of natural love and affection. It is often used for interfamily transfers or charity, where the transfer occurs without sale or exchange. However, the stamp duty and tax implications must be considered before proceeding.

Will

A will is a legal document that specifies how a person’s assets will be distributed after their demise. It facilitates designating beneficiaries for their property, appointing an executor to administer their estate, and nominating guardians for minor children. A will may also include instructions for legal heirs, family members, and beneficiaries regarding paying debts, taxes, charity, good deeds, and other expenses. There is no inheritance tax in India at present.

Trusts

A trust in estate planning is generally an arrangement wherein the settlor transfers assets to be held and managed for the benefit of the beneficiaries. Trusts can be used to achieve various estate planning goals, such as avoiding probate and providing for minor children or individuals with special needs in the settlor’s absence. Private trusts in India are governed by The Indian Trusts Act of 1882.

Power of Attorney

A power of attorney authorises an agent to act on behalf of the principal in financial, legal, administrative, and personal matters. This instrument is part of estate planning as it allows the principal to designate an attorney to make decisions and act on their behalf if they become incapacitated or unable to manage their affairs independently due to physical constraints or other reasons.

Family Settlement

A family settlement or arrangement can resolve disputes or conflicts regarding family properties and other assets. Dividing inherited property, family businesses, and financial assets is generally preferred.