Wills, relinquishment deeds and gift deeds all aid in the planning process. The purpose of this article is to explain and distinguish the relationship between a will, a gift, and a relinquishment deed in the Indian context.
Relationship Between Will Gift and Relinquishment Deed: Estate planning is the process of transferring or giving personal assets to anyone or loved ones. The process of succession planning is the process of selecting and identifying a reliable successor. Both of them facilitate the orderly transfer of a person’s assets and wealth which can avoid any confusion that could lead to future family feuds or any legal complications. Now Vakilsearch will let you through the relationship between will gift and relinquishment deed in the Indian context.
Wills for Property Verification
In India, the will is the most commonly used estate and succession planning tool. A legal document in which a person, called a testator, announces or declares his or her intentions regarding the assets to be transferred or handed over after his or her death. A will is a document that takes effect only after or upon the death of the person.
A “will” is defined as “the legal document of a testator’s intention declaration of his property verification that he wants to give to someone after his death” under the Succession Act, 1956. A valid will must include the testator’s capacity and a clear intention regarding the will and the signatures of witnesses to the will.
Gifts for Property Verification
A gift deed is a popular succession or estate planning tool. A gift is explained as “the transfer of moveable or immovable property by a person to another. A gift is a free transfer of movable or immovable property between the “donor” (transferor) and the “donee” (transferee). It must be given by one own wish and should be accepted by the person during his or her lifetime. A Gift deed can only be used to transfer an existing property verification, according to 124 Section of the TP Act, 1882. Furthermore, once the donee is accepted, it must be registered in law. A gift deed, once given cannot be cancelled or revoked by the donor. In India, as per Indian law, some states also provide concessions when the property verification is transferred through a gift deed or given to blood relatives.
Relinquishment Deed for Property Verification
If a person passes away without a will, then his or her right to the property passes to the lawful heirs under the law of the Succession Act, 1956. As a result, the legitimate heirs may choose to keep their shares or their part of rights without or with compensation. A relinquishment deed allows the owner to transfer their property legally to another co-owner. It is worth it as this deed can only be executed by co-owners. A person cannot give up his or her interest in a property in order to benefit a third party. Any person who owns a piece of property can sell it. All of the requirements for a valid contract outlined in Section 10 of the Indian Contract Act, 1872 apply to relinquishment deeds as well.
Relationship Between Will Gift and Relinquishment Deed
| Parameters of Comparison | Will | Gift | Relinquishment Deed |
| Execution | Will is executed only after the death | Gifts can be given anytime by the donee and donor. | Anytime by the owner to another co-owner. |
| Registration | Registration is not required. | Registration is required under Section 17 of the 1908 Registration Act. | Registration is required under Section 17 of the Registration Act, 1908. |
| Consideration | A will is made without any thought. | This is made without any regard for the recipient. | A consideration element may or may not be included in a relinquishment deed. |
| Tax Implications | There are no tax consequences for the beneficiary. | A gift worth after a certain amount (₹50,000) is taxable in the hands of the donee. A gift received during the marriage by relatives is exempted from taxation. | A ‘transfer’ under a relinquishment deed provides no benefits in tax. As a result, transferring a property right will result in transferor capital gains. |
| Type of property | The transferred property can be any self-acquired moveable or immovable property. | The property gifted must be the current property of the donor, not the future property. | It can be inherited or acquired on one’s own. The transferor must necessarily inherit the property being transferred. |
| Revocation | Under the Succession Act of Section 70, a will can be revoked. | A gift deed, once issued, can’t be revoked until and unless it is proved as coercion or fraud. | Even if there is no consideration, a relinquishment deed cant be revocable. It can only be proven in court on the basis of fraud or coercion. |
The Relationship Between Will Gift and Relinquishment Deed is a topic of significant importance when it comes to estate planning and property transfer. Both wills and gift deeds are legal instruments that allow individuals to transfer property or assets to their loved ones or beneficiaries. On the other hand, relinquishment deeds are used to transfer ownership of property between family members, particularly in cases where one member wants to relinquish their share in the property.
The Relationship Between Will Gift and Relinquishment Deed is significant in estate planning and property transfer. While a will or gift deed is used to transfer property to a family member or loved one, a relinquishment deed is typically utilized when a family member wants to surrender their share in a property to another member. This type of transfer is commonly done when family members intend to split the property or sell it to a third party. Unlike a will or gift deed, a relinquishment deed involves a transfer of ownership between family members and does not require any monetary compensation.
The Relationship Between Will Gift and Relinquishment Deed is crucial in understanding the nuances and implications of each instrument. While a will and a gift deed serve similar purposes, there are distinct differences between them. A will comes into effect after the death of the testator, whereas a gift deed takes effect during the lifetime of the donor. Additionally, while a will allows for the transfer of all types of property, a gift deed only allows for the transfer of tangible assets.
The Relationship Between Will Gift and Relinquishment Deed is also relevant in terms of tax implications. Gift deeds and relinquishment deeds are subject to gift tax, whereas wills are not. However, if a will involves the transfer of a large estate, it may be subject to estate tax.
When it comes to estate planning, it is essential to consider all three instruments and their implications. The Relationship Between Will Gift and Relinquishment Deed highlights the need for careful consideration and planning in the transfer of property and assets. While each instrument serves a unique purpose, they are all connected in their ability to transfer ownership and provide for loved ones.
Conclusion
In conclusion, The Relationship Between Will Gift and Relinquishment Deed is an important topic for anyone involved in estate planning or property transfer. It is essential to understand the differences between each instrument and the implications they have on the transfer of property and assets. With proper planning and consideration, individuals can ensure that their loved ones are provided for and their assets are transferred in the most efficient and effective way possible.
FAQs
What is the legal status of a relinquishment deed?
According to the Limitation Act, 1963, a relinquishment deed must be cancelled within three years of the date the right was conferred.
What is the distinction between a gift and a relinquishment deed?
A gift deed, once issued, cannot be revoked, but it can be challenged in court on the grounds of fraud or coercion. Even if there is no consideration, a relinquishment deed is irrevocable. It can only be challenged in court on the basis of fraud or coercion.
Can parents reclaim their given property?
A gift deed is never revocable. As a result, Gifted property cannot be reclaimed unless and until it is legally proven that the gift deed was carried out under threat of mental illness or coercion or any other issues.
Which is more preferable, a will or a gift deed?
If you only want to ensure that your assets pass on to people of your choice after death, and you want to enjoy and control those assets during your lifetime, then a will is a good idea.
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