This article is written by Athira R Nair, a student of the School of Law, Christ University, Bangalore. This article consists of an overview of will, gift deed, relinquishment deed and their transferability.
Table of Contents
Introduction
Estate planning refers to the process by which one disposes of their personal assets to their loved ones whereas succession planning refers to the process by which one identifies and chooses a reliable successor. They both facilitate the transfer of a person’s wealth and assets in an orderly manner so as to avoid any potential confusion that may lead to family feuds or legal complications in the future. The wills, gift deeds, and relinquishment deeds aid the process of succession and estate planning.
This article aims to shed light on these instruments of succession and estate planning and distinguish the differences between them.
What is a will : an overview
According to Section 2(h) of the Indian Succession Act (1925), a ‘will’ is a legal declaration of a testator’s intent regarding the transfer of ownership of their property upon their demise. So, a will is essentially any legal document stating the legal means by which a person desires to dispose of their assets and wealth in the event of their death. It is also called a testament. This document usually contains all the testator’s dispositions in writing. However, there are oral wills as well. They are referred to as nuncupative wills and are legal only in certain jurisdictions. A will comes into effect only after the demise of the testator. They are the most common instruments for succession and estate planning in India. A person is said to have died intestate if they did not leave any instructions regarding the disposal of their property and have no will at the time of their demise. This usually happens in cases involving the death of young people. In such situations, the property of the deceased is distributed as per the law.
Essential elements of a will
For a will to be valid, there are certain essential characteristics they should possess. These include the following:
Legal declaration
All the documents related to the will ought to be in conformity with the law. Furthermore, the executor of the will should be legally competent to execute it.
Intent
The intent of a will should be expressly declared as the transfer of ownership of the testator’s property. Without this, the will is not binding or executable.
Property disposition
The will should be made to facilitate the transfer of the testator’s wealth and assets to the people of his choice.
Effect after death
A will is executable only after the death of the testator. Till then, the testator exercises complete ownership over the property and may amend the will at any time as per their convenience. A will is executed after the testator’s demise by their executor after an application to obtain a letter of administration is filed before the court.
Types of wills
Privileged wills
Section 65 of the Indian Succession Act (1925) deals with privileged wills. They are essentially written or oral wills made by soldiers, airmen, or mariners who have completed eighteen years of age that mention the manner in which they desire to dispose of their property.
The execution of these wills is governed by certain rules which are mentioned in Section 66 of the Indian Succession Act (1925). This Section, inter alia provides for the validity of unfinished wills and even wills which the soldier, airman, or mariner instructed to prepare but died before the execution. The privileges enacted in these provisions are to compensate for the predicaments faced by soldiers, airmen, and mariners during the tenure of their service.
Unprivileged wills
Unprivileged wills refer to those wills that are created by any person who is not an airman employed in an expedition, a mariner at sea, or a soldier who is engaged in actual warfare. Section 63 of the Indian Succession Act (1925) deals with the execution of unprivileged wills. Unprivileged wills are valid only if the testator signs or makes another person sign the will in their presence with the intention to give effect to its writing and there are at least two witnesses present to attest the will who observed it while it was being created either by the testator or on their instruction.
Contingent wills
Contingent wills refer to those wills that can be executed depending on the happening of a future event or upon the satisfaction of certain conditions. Owing to this, they are also called conditional wills. These wills are invalid in situations wherein the contingency fails to occur or the conditions are not fulfilled. The wills involving conditions that are opposed to law or invalid in nature cannot be executed either.
Joint wills
Joint wills refer to testamentary documents wherein two or more people agree to make a conjoint will. They cannot be revoked by one of the testators without the consent of the other testators if they are alive. Such wills are usually made by married people who intend to leave their property to their spouse upon their demise. Joint wills are not enforceable during the lifetime of any of the testators if they were meant to take effect only after the death of all the testators.
Mutual wills
Mutual wills refer to wills wherein two people consent to certain terms and conditions that are mutually beneficial to both parties. In situations involving these wills which have reciprocal benefits, the testator gives the other person the status of their legatee. These wills are binding on the surviving parties even after the death of any party. Mutual wills are usually created by married couples with children from previous marriages so as to ensure that the children get the property they are entitled to and it is not inherited by any potential future spouses instead.
Concurrent wills
Concurrent wills refer to co-existing wills written by a testator which contain instructions regarding their property disposal. Instead of having a single will, the testator chooses to make different wills as it reduces the complications associated with the disposal of different kinds of property, for instance, movable property, immovable property or property they own in different geographical locations. A concurrent will makes the process of property transfer more convenient for the testator.
Duplicate wills
Duplicate wills refer to wills that have two copies but are considered to be a single will. According to Section 63 of the Indian Succession Act (1925), in order to make a duplicate will, a testator has to make a copy of their original will, sign it, and get it attested. Duplicate wills are made as a safe backup to rely on in the event that something happens to the original will. The testator keeps a copy with them and gives the other to a trustworthy person like their executor, attorney, or in certain cases keeps it in a bank locker. A duplicate will is authentic and executable only when the original will is not on record. In circumstances wherein the testator willfully destroys the original, the duplicate will is revoked automatically.
Holograph wills
Holograph wills refer to wills written by the testators themselves. Provided there are no suspicious circumstances, these wills have their own merit and can be executed with ease owing to the fact that the testator has handwritten the entire will on their own.
Sham wills
Wills that are not created for the sole purpose of disposing of a testator’s property but have another ulterior motive are referred to as sham wills. The ulterior purpose these wills aim to fulfill is usually unethical. For instance, immoral acts like deceiving someone or acquiring property that the claimant is not entitled to constitute sham wills. Since a will is invalid if the testator does not consent to it, these wills are invalid. Section 61 of the Indian Succession Act (1925) states that all wills that are made through fraudulent means or under coercion that deprive the testator of their free-agency will be considered invalid.
Making of a will
In India, anyone over the age of 21 years is eligible to make a will. That said, there are certain prerequisites one should consider while doing so. Mentioned below are a few points to be factored in the making of a will.
Form
The will can be made on either plain paper or stamp paper. Though the latter is preferred, it is not a necessity as per the law. All testators are advised to write their own wills as opposed to getting someone else to write it for them or printing it as this facilitates verification in case any question regarding the validity of the will arises.
Necessity
Though it is considered a taboo in India, people ought to make wills at the earliest to avoid any future altercations between family members regarding property distribution. In situations wherein a person passes away without a will, then their property is distributed as per the laws of inheritance and succession which differ based on the religion the person followed. In the case of Hindus, the Hindu Succession (Amendment) Act (2005), is followed, Christians follow the provisions under the Indian Succession Act (1925), and the property of Muslims is distributed as per the Holy Quran.
Constituents of a will
Though there is no official prescribed format of a will, there are several essential constituents that are required for a will to be valid and legally enforceable. Mentioned below are certain parts of a will that can be used as a reference format.
Declaration
At the very beginning of the will, the testator is to declare that they are making this will of their own accord and are in their complete senses while doing so. The testator has to clearly state that they are under no pressure or coercion from any third party. The testator should also clearly mention their name, address, date of birth, and the like to prove that they are not under any influence at the time of making this declaration.
Details of property and documents
The testator should list out all their assets alongside the current market value of those assets. Every detail regarding their assets and any other items they own should be mentioned. For instance, the current location of the assets, documents stating ownership of the assets, and the like. Assets include valuables like the testator’s property, house, bank accounts, mutual funds, and other investments. The future location of the will, the procedure to execute the will, details of the executor, and the like should also be mentioned in the will and communicated to both the family members of the testator and the executor.
Details of ownership
The testator has to mention who the future owner of their assets will be with clarity. All their assets should be stated alongside the name of the future owner and the proportion they are going to own. This will avoid any confusion and future altercations between the beneficiaries. In case the testator wishes to leave some property for a beneficiary who happens to be a minor, then they have to appoint a trustworthy custodian of the assets till the beneficiary attains the age of majority.
Signing the will
After the testator has completed writing the will, they must sign it in the presence of a minimum of two witnesses who will also have to sign thereafter declaring their presence at the time of the testator’s signature. The witnesses will have to sign every single page of the will. The bottom of the will should indicate the date and place in which it was made. After all of the formalities are completed and the will is made, it should be placed in a sealed envelope containing the testator’s signature and date of sealing.
Registration of a will
According to Section 18 of the Registration Act (1908), the registration of a will is not compulsory. Though it is highly recommended to register a will in order to ensure its safety, unregistered wills are valid and executable too. In the case of Narain Singh v. Kamta Devi (1953), it was held that a will cannot be deemed ingenuine simply on account of non-registration.
Revocation of a will
All wills are ambulatory. This means that a testator may revoke or change it at any time before their demise, provided they are competent to do so. A will is said to be revoked when the testator takes some action to indicate that they do not want the provisions of the will to be legally binding anymore and their decision is lawful. A revocation is lawful only when the intention of the testator is clear. It may be either express intent or implied but the act of revocation must be consistent with the intent.
A document called codicil is used by testators to revoke a will. It can be used to partly or wholly amend a will too. A testator may also revoke their initial will by making a new one as a new will indicates a testator’s intent to revoke their earlier will, as observed in Kuppuswami Raja and Anr. v. Perumal Raja and Ors. (1963). Additionally, any statement made by the testator around the time they destroy a will, for instance by burning or tearing it will be considered as a demonstration of their intent to revoke the will. These are situations wherein a will is revoked intentionally. There are certain instances wherein a will is revoked unintentionally. For instance, in the case of a divorce, if the testator does not revise their will, any disposition to their former spouse is revoked automatically.
Sample format of a will
Below is an illustration of a template of a will:
I, ______________, son of Shri _______________, aged __ years, resident of _____________________________, do hereby revoke all my former Wills, Codicils and Testamentary dispositions made by me. I declare this to be my last Will and Testament.
I maintain good health, and possess a sound mind. This Will is made by me of my own independent decision and free volition. Have not be influenced, cajoled or coerced in any manner whatsoever.
I hereby appoint my ________________, as the sole Executor of this WILL.
The name of my wife is _________________. We have two children namely, (1) __________________ (2) ________________, I own following immovable and movable assets.
1. One Flat No.___ in _______________________.
2. Jewellery, ornaments, cash, National Saving Certificate, Public Provident Fund, shares in various companies, cash in hand and also with certain banks.
All the assets owned by me are self-acquired properties. No one else has any right, title, interest, claim or demand whatsoever on these assets or properties. I have full right, absolute power and complete authority on these assets, or in any other property which may be substituted in their place or places which may be Acquired or received by me hereafter.
I hereby give, devise and bequeath all my properties, whether movable or immovable, whatsoever and wheresoever to my wife, _____________________, absolutely forever.
IN WITNESS WHEREOF I have hereunto set my hands on this ____ day of ____, 20__ at ____________.
TESTATRIX
SIGNED by the above named Testatrix as his last WILL and Testament in our presence, who appear to have perfectly understood & approved the contents in the presence of both of us presents, at the same time who in his presence and in the presence of each other have hereunto subscribed our names as Witnesses.
WITNESSES :
1.
2.
Gift deed : an overview
As per Section 122 of the Transfer of Property Act (1882), a ‘gift’ refers to the voluntary transfer of some existing property made without consideration. A gift deed is a legal document used for this purpose. The property in question here can be moveable or immoveable. It should mandatorily be existing, transferable, and tangible. The person transferring the property is called the donor whereas the person receiving the property is called the donee. The property may be accepted by the donee themself or even by some other person on their behalf. The transfer of a gift from a donor to the donee is valid only when the donee accepts it during the donor’s lifetime. The offer of transfer ceases to exist upon the donor’s demise if the donee has failed to accept it till then. Once a donee accepts and registers a gift deed, the donor cannot revoke or cancel the same.
According to Section 124 of the Transfer of Property Act (1882), a gift deed is valid only when the property being transferred already exists. Gift deeds regarding the transfer of future property are void. A gift deed is an unconditional transfer and does not involve any consideration whatsoever. It is a gratuitous offer made from love. The donee of a gift can be a minor too. Gift deeds are an exception to Section 11 of the Indian Contract Act (1872) which deals with competency to contract and states that contracts entered into by minors are void as they lack the capacity to contract. Furthermore, the donee of a gift can be an unborn person too. In such situations, the gift can be accepted by someone else on behalf of the donee.
Essential elements of a gift deed
For a gift deed to be valid, there are certain essential characteristics it should possess. They include:
Transfer of ownership
The ownership of the property shifts from the donor to the donee as and when the property is transferred. In the case of conditional gifts, the transfer of property is made without any consideration but there are certain conditions that have to be adhered to. These conditions have to be in accordance with the provisions of the Transfer of Property Act (1882). In case any of these conditions are not fulfilled, then the ownership does not shift to the donee.
Existing property
The property being transferred to the donee should be existent. It may be either moveable or immoveable property. A donor cannot gift a future property that they do not have ownership of yet. A donor may transfer the property they receive as their share from the joint family property at the time of partition.
No consideration
Property that is being transferred as a gift should not have any consideration associated with it. Love and affection do not constitute consideration. In case any monetary consideration is involved, the very nature of transference of property as a gift is destroyed. The transfer becomes similar to a sale in such situations as it is not gratuitous.
Free consent of the donor
The offer to transfer the gift should be made by the donor voluntarily. The donor should not be forced, coerced, or under any undue influence. In situations wherein a gift deed is said to be made under undue influence, the unconscionability of the transaction must be proved. The mere relationship between the donor and the donee is not conclusive to exercise undue influence.
Competency of the donor
Section 7 of the Transfer of Property Act (1882) deals with the competency to contract while dealing with gift deeds. It states that the donor or the transferor should have attained the age of majority, should be of sound mind, and should not be otherwise disqualified as per the law. So, a minor does not have the capacity to be the donor of a gift deed.
Acceptance of gift
A gift deed is valid only if the donee accepts it on their own. In situations wherein the donee is a minor, acceptance of the gift deed can be made on their behalf by their guardian. Here, on attaining the age of majority, the donee may either accept or reject the gift. The donee must accept the gift during the lifetime of the donor. As per Section 122 of the Transfer of Property Act (1882), a gift deed is void if a donee dies before accepting it.
Types of gift deeds
Revocable gift deed
In the case of revocable gift deeds, the legal document stays with the donor till they decide to hand it over to the donee. The gift can be revoked by the donor at any time during their lifetime. Here, the donor has no legal obligation towards the donee.
Irrevocable gift deed
In the case of irrevocable gift deeds, the donee legally becomes the owner of the gift as soon as they physically receive the gift. Once this is done, the donor cannot revoke the gift. A gift deed cannot be revoked once it is executed and registered unless the requirements of Section 126 of the Transfer of Property Act (1882) are fulfilled.
Making of a gift deed
There are no specifications regarding who can make a gift deed. The only requirement is that the donor should be competent as per Section 7 of the Transfer of Property Act (1882). That said, there are certain clauses that have to necessarily be present in a gift deed for it to be valid. They include the following-
Constituents of a gift deed
Date and place
The date of execution followed by the place at which the execution is taking place should be mentioned in the gift deed.
Free will of the parties
The donor should be transferring the property of their own accord and not due to any coercion, undue influence, threat, or fear. Their intention of voluntarily transferring the gift should be clearly mentioned in the gift deed.
Details about the property
All the details regarding the property being transferred should be mentioned in the gift deed so as to avoid any probable uncertainties or ambiguities that may arise. This includes an exhaustive description of the property’s location, structure, area, and the like.
Consideration
The gift deed should clearly state that the consideration involved is limited to love and affection. The fact that there is absolutely no monetary exchange involved should also be clearly stated. In case there is any consideration of material value involved, then the transaction will not be considered as a gift.
Possession of the property
The property which is being transferred by the donor to the donee should be in the possession of the donor at the time of the transfer. This means that the transfer is valid only if the concerned donor is the titleholder of the property. This should be stated with proof of ownership in the gift deed.
Information about the parties involved
All the information regarding both the donor and the donee should be clearly stated in the gift deed. This includes their names, residential addresses, date of birth, and other relevant details about them.
Relationship between the parties involved
The relationship between the donor and donee should be mentioned in the gift deed. Gifts made out to donees differ based on the nature of the relationship they share with the donor. For instance, if the donee is a blood relative of the donor, the parties may avail certain privileges like a stamp duty concession.
Related rights and liabilities
Any rights and liabilities that are related to the transaction which have to do with either of the parties should be stated clearly in the gift deed so as to avoid any future discrepancies regarding the same. This includes all rights or liabilities attached to the gift, for instance, matters like whether or not the gift is allowed to be further sold or leased.
Additional rights conferred upon the donee
The rights of the donee should be clearly mentioned in the gift deed as it forms an inseparable part of it. This would also act as proof in the case of future problems that may arise regarding various aspects of the property being gifted, like its rent, profit, basic structure, and the like. The donor should clearly state the additional rights and authority over the property they are conferring upon the donee.
Delivery of the gift
It is necessary for the gift deed to contain a delivery clause that expressly or impliedly talks about the action through which the delivery of the possession of the property is confirmed. This would facilitate clarity regarding the status of the transaction.
Revocation clause
Many gift deeds contain revocation clauses even though it is not mandatory. This is because they help solve any future conflicts that may arise regarding the revocation of the gift deed. It may be expressed or implied and is highly recommended. That said, both the parties involved should expressly consent to this clause for it to be applicable.
Signatures
Both the parties involved should sign the gift deed once it is drafted for it to be valid and legally binding.
Witnesses
The gift deed should be drafted and signed by both parties in the presence of two competent witnesses for it to be valid and legally binding.
Registration of a gift deed
According to Section 17 of the Registration Act (1908), a gift deed is valid and legally binding only once it is registered. The subsequent stamp duty payable on registration varies depending on the state. Section 123 of the Transfer of Property Act (1882) addresses registration of gift deeds too. In this Section it is stated that the registration of a gift deed is necessary for immovable property to be validly transferred as a gift. It is also mentioned that the gift deed ought to be signed by the donor and the donee and be attested by two witnesses too. The gift deed is to be drafted on stamp paper which should also be signed by both the parties involved and be attested by two witnesses. Even the stamp paper is to be registered as per this Act.
Tax implications of a gift deed
As per Section 56 of the Income Tax Act (1995), gift deeds are completely tax-exempt provided that are below Rs. 50,000 in value without any consideration. If the amount exceeds Rs. 50,000, then, the entire amount received is liable to be taxed under the head of ‘income from other sources as per the Income Tax Act (1995). That said, there are certain exceptions to this. For instance, any wealth or property that a donee acquires from their close relatives or at the time of their marriage will not be taxed. This applies to any wealth or property one receives under a will too.
Revocation of a gift deed
Section 126 of the Transfer of Property Act (1882) deals with the suspension or revocation of a gift deed. This Section lays down two modes of revocation namely, revocation by mutual agreement and revocation by rescission.
As per the former approach, a gift deed may be suspended or revoked on the happening of an uncertain event that is not within the donor’s scope. Here, the gift deed is not revoked solely on the donor’s will. The condition of revoking the gift in such circumstances should be expressed and not implied. In the case of Mool Raj v. Jamna Devi (1995), the Court held that unconditional gifts cannot be revoked by a donor. A condition laid down under separate mutual agreements between the donor and the donee which are concerned with the gift deed is valid and enforceable. So, they can be grounds for revoking the gift. This was stated by the Court in the case of Thakur Raghunath Ji Maharaj v. Ramesh Chandra (2001).
Another method to revoke a gift deed is by rescission as contracts. Since a gift is a voluntary transfer of ownership by the donor to the donee, proving that the consent of the donor was not free is grounds for revoking the gift. Section 126 of the Transfer of Property Act (1882) states that a gift deed can be revoked on all the grounds on which a contract can be revoked. As per Section 19 of the Indian Contract Act (1872), in situations wherein the consent of the donor is obtained through coercion, undue influence, fraud, or misrepresentation, the contract of the gift is voidable at the option of the donor. In case of the donor’s death, if any gift they gave is to be revoked on these grounds, then their legal heirs may sue on their behalf. All gifts being revoked on these grounds ought to be done within 3 years from the date the donor learns of it. Apart from the aforementioned grounds, there are no other ways through which a gift deed can be revoked.
Sample format of a gift deed
Below is a specimen template of a gift deed :
This deed of gift made this ______ Day of __________(month) ____________ (year) between;
Mr. __________________, Age ____years,
Resident of _____________________
(Hereinafter called the “Donor”) of the One part
And,
Mr/Miss ___________________, Age ____ years,
Resident of __________________
(Hereinafter called the “Donee”) of the other part.
Witnesseth as follows:
- In consideration of natural love and affection being the son/daughter of Donor, the donor hereby assigns to the donee a sum of Rs._____________ (amount) to be held by the donee absolutely.
- The possession of the Rs._____________(amount) vide cheque No. ________Drawn on _____________________ , _____________ Branch dated _/_/__ hereinabove donated unto the donee and has been physically handed over to the donee as absolute owner before execution of this Gift Deed.
- The said gift of Rs.______________(amount) has been accepted by Mr/Miss ___________________________.
- The donor from this date reserves no right or interest on the said sum hereby gifted which shall from this day be the sole and exclusive property of the donee.
- The property hereby gifted is the donor’s self-acquired property accumulated out of income earned and has full right and authority to dispose of the same in any manner he may think fit.
In witness whereof, the parties hereto have put their respective signatures on this deed of gift in presence of witnesses.
SIGNATURE, NAME AND Donor
ADDRESS OF THE WITNESS
Relinquishment deed : an overview
Relinquishment of property refers to the process by which the legal heir of a deceased person transfers their property in the favour of another legal heir. It is usually applicable in situations wherein a person dies intestate, that is, without writing a will. Here, the deceased person’s property is automatically inherited by their legal heirs. So, their legal heir now has the authority to decide what should be done with the inherited property. Relinquishment of property takes place when the legal heirs decide to transfer the property instead of keeping it and the legal document in which the legal heir formally releases their rights over the inherited property and transfers it to the other person is called a relinquishment deed.
Essential elements of a relinquishment deed
For a relinquishment deed to be valid, there are certain essential characteristics it should possess. They include:
Must be in writing
The relinquishment deed should be in writing if it is regarding an immovable property. It should also be signed by the parties involved.
Witnesses
The relinquishment deed should be drafted and signed in the presence of two witnesses for it to be valid and legally binding
Multiplicity of inheritors
For a relinquishment deed to be valid, there should mandatorily be more than one person who is inheriting the relinquished property.
Must be in favour of a co-owner
A relinquishment deed cannot be made in favour of any third party. The beneficiary of a relinquishment deed should necessarily be a co-owner of the property. In simpler terms, a relinquishment deed can only be made out from one legal heir to another. If this is not the case, then the transfer is treated as a gift rather than a relinquishment of property.
Effect
After the process of relinquishment of property is formalized by the signing of the relinquishment deed, the share of the legal heir transferring the property is reduced and the share of property owned by the legal heir benefiting from this relinquishment increases with immediate effect.
Irrevocability
Once formalized, a relinquishment deed cannot be undone or revoked even if the parties allege that that transfer was made in error.
Consideration not mandatory
A relinquishment deed containing no consideration is valid and can be registered. It may or may not require consideration.
Making of a relinquishment deed
Any person who has a share in some property can relinquish it. All the essentials of a valid contract stated under Section 10 of the Indian Contract Act (1872), are applicable to relinquishment deeds as well. Some of the other content that is to be necessarily mentioned in a relinquishment deed are mentioned below.
Constituents of a relinquishment deed
Title and introduction
All relinquishment deeds must necessarily have a title. This can either be ‘Relinquishment Deed’ or ‘Deed of Relinquishment’. It should also have an introduction and clearly mention the date of creation.
Details of the executants
All relevant details regarding the person making the relinquishment deed, that is the person who is legally inheriting the property in question should be stated. They are commonly referred to as the executant or releasor of the property. Relevant details include full name, address, name of spouse, and the like.
Details of the shares
All the parties involved should clearly mention the proportion of shares they are holding at the time of the relinquishment along with all other relevant details regarding their shares.
Executant’s statement of release
The executant should clearly mention that they are releasing their share of the inherited property in favour of the beneficiary of their own accord and without any financial transaction involved. Alongside this declaration, the property description should be stated again and the executant should also state that they do not have any rights over the relinquished property hereafter.
Registration of a relinquishment deed
As per Section 17 of the Registration Act (1908), a relinquishment deed is valid and legally binding on the concerned parties only after it is registered. Additionally, it is mandatory for the registration to be made at the office of the Sub-Registrar that happens to be closest to the property in question. The cost of registration varies based on the state the relinquished property is in.
Revocation of a relinquishment deed
It is not possible to revoke a relinquishment deed. However, if the situation calls for it, the parties involved are allowed to challenge it in the Court on certain grounds of law. This includes situations wherein the deed is formulated using coercion, fraud, misrepresentation, or other such unlawful means. If any party does not agree with this, the matter is resolved in a civil court. That said, cancellation of a relinquishment deed can only take place within the first three years of registration.
Sample format of a relinquishment deed
Below is an illustrative template of a relinquishment deed :
Deed of Relinquishment is made on this ———the day of——— by ————, residing at——— (hereinafter called the First party which expression shall unless repugnant to the context thereof shall deem to include heirs, executors, administrators and assigns) OF THE FIRST PART.
AND
—————- Residing at —————– (hereinafter called the second party, which expression shall unless repugnant to the context thereof shall deem to include heirs, executors, administrators and assigns) OF THE SECOND PART.
Whereas the Party of the First Part is the legal heir of the deceased Late Shri/Smt.————– who died interstate.
AND WHEREAS the said Shri/Smt. —————– has left behind him a property i.e. flat no.———– situated in ———-admeasuring about ——- sq. ft. consisting of ————— rooms at—————.
AND WHEREAS the second party has been residing with the deceased since last————— years.
AND WHEREAS during the lifetime of Shri/Smt.—————– he had expressed his desire to bequeath the said, flat to the party of the second part.
AND WHEREAS the party of the first part was also aware of the same and as such for transmitting share an interest in the said flat no.———— in favor of the party of the second part and the first party has shown his readiness and willingness to execute necessary documents by relinquishing his share and interest as a legal heir in the said property.
AND WHEREAS mutually it has been agreed that for the said share and interest as legal heir in the said property of Late Shri/Smt.————— for consideration of Rs—— to which the second party has agreed to give to the party of the first part.
AND WHEREAS the second party in order to become the exclusive owner of the premises, the first party relinquishes and ceases to have any right, title or interest therein.
AND WHEREAS it is necessary to bring this fact on record.
NOW, THIS DEED/INDENTURE WITNESSES:
The First Party has released and relinquished in favor of the second party all their rights, titles an interest in the said, flat situated at ———- and to hold the same as the absolute owner along with all furniture and fixture standing thereon.
And the first parties do hereby declare that the said premise has been the exclusive property of the second party with effect from ————–.
That the first party does hereby declare that the second party is entitled to have his name incorporated as the owner of the said, flat in the records of the society by transferring share, title, and interest in his name.
And the first party will do every such assurance or thing for further or more perfectly assuring the property released to the second party as may be reasonably required.
IN WITNESS WHEREOF the parties hereto have executed this instrument on the date, first hereinabove mentioned.
WITNESS
- First party
- Second-party
Note: The above illustrations are samples of will, gift deed and relinquishment deed and are not exhaustive in nature. While drafting the above documents, it is always advised to receive legal guidance from an advocate or solicitor.
Table distinguishing between wills, gift deeds, and relinquishment deeds with respect to transferability
| Parameter for comparison | Wills | Gift deeds | Relinquishment deeds |
| Nature | A legal document displaying a testator’s intent regarding the transfer of ownership of their property upon their demise. | A legal document for the transfer of a gift in the form of property from a donor to a donee without any consideration. | A legal document wherein a person gives up their legal rights to some specified property and hands it over to someone else with the latter’s consent. |
| Property type | The property being transferred may be any self-acquired moveable or immoveable property. | The property gifted by the donor to the donee has to be existing property and not future property. It may be inherited or self-acquired. | The property being transferred must necessarily be inherited by the transferor. |
| Registration | Registration is not mandatory. Unregistered wills are valid and executable too. Should be mandatorily attested. If a testator chooses to register the will, it should be done as per Section 18 of the Registration Act (1908). | Registration and attestation are mandatory. Registration should be in accordance with Section 17 of the Registration Act, (1908). | Registration and attestation are mandatory. Registration should be in accordance with Section 17 of the Registration Act, (1908). |
| Effect | Effect after the death of the testator. | Immediate effect during the lifetime of the donor and the donee. | Immediate effect during the lifetime of the co-owner towards another co-owner. |
| Relation | The parties involved can be related in any manner whatsoever. The only restriction is that a witness to the will cannot be a beneficiary. | The parties involved may or may not be related to each other. | The parties involved must necessarily be related to each other. |
| Beneficiary | Made in favour of any person, trust, business, and even charitable organisation. | Made in favour of a person the donor loves, has affection towards, or is devoted towards. | Made in favour of a co-owner or a family member. |
| Acceptance | Does not require acceptance. | Requires acceptance during the lifetime of the donor. | Requires acceptance by the person in whose favour it is made. |
| Consideration | A will does not usually involve any consideration between the parties. | There is no consideration involved between the parties. | A consideration may or may not be involved. It depends on the parties. |
| Tax implications | Any wealth or property received under a will is tax exempted. | Any money or property received as a gift deed is taxable provided it is not received from a close relative or during marriage. | Relinquishment deeds are not entirely taxable. Tax is only levied on the portion of the property in which the right is relinquished. |
| Revocation | It is revocable. A will should be revoked as per the provisions of Section 70 of the Indian Succession Act (1925). | It is irrevocable. That said, a gift deed can be challenged in Court if there was any fraud or coercion involved. | It is Irrevocable. A relinquishment deed cannot be revoked even if it does not have any consideration. However, it can be challenged in Court on the grounds of fraud and coercion too. |
| Examples | If A leaves behind a document stating that their property is to be divided equally between B and C upon their death, the document in question is called a will. | If A wants to give a share of his property to B out of love and affection, with no consideration involved, then the document used to formalize the process is called a gift deed. | Upon A’s death without a will, his daughter B can leave the share she inherited from A on account of being his daughter to her brother C by using a relinquishment deed as an instrument. |
Conclusion
The process of estate and succession planning involves various aspects that have to be considered carefully. They must take a decision only after weighing all odds and ascertaining the most profitable and beneficial solution.
The most common instruments of estate planning are wills, gift deeds, and relinquishment deeds. While it comes down to making a choice between the three, it depends on the specifics of the situation and is subjective. For instance, in cases wherein inheriting the property after the death of the testator is the best suited, a will would be ideal. Contrarily, if the donee wants to bequeath the interest in the property right away during the lifetime of the donor, a gift deed would be the best-suited choice. That said, the person’s objective alone will not be the sole deciding factor.
To achieve the most ideal outcome while dealing with estate and succession planning, a person has to consider various other factors like the related costs and tax implications too. It is recommended that people consult legal and tax experts while dealing with such matters.
References
- https://www.mondaq.com/india/wills-intestacy-estate-planning/1085494/difference-between-transferability-of-will-gift-and-relinquishment-deed
- https://www.mondaq.com/india/wills-intestacy-estate-planning/885866/types-of-wills
- https://www.ilms.academy/blog//gift-under-transfer-of-property-act-1882
- http://docs.manupatra.in/newsline/articles/Upload/541112EC-983D-422F-88C8-37D4082AEDD6.pdf
- https://www.findlaw.com/estate/wills/making-a-will.html
- https://www.jagoinvestor.com/2010/11/how-to-make-a-will-in-india-and-its-importance.html
- https://law.jrank.org/pages/11322/Will-Revocation-Will.html
- https://www.lawnn.com/gift-deed/
- https://www.lawnn.com/relinquishment-deed/
- https://housing.com/news/everything-you-need-to-know-about-relinquishment-deed/#:~:text=A%20relinquishment%20deed%20cannot%20be,in%20the%20courts%20of%20law.
- https://prsindia.org/files/bills_acts/acts_states/karnataka/1957/1957KR34.pdf
- https://legislative.gov.in/sites/default/files/A1899-2.pdf
- https://moj.gov.jm/sites/default/files/laws/Wills%20Act.pdf
- https://www.myadvo.in/blog/gift-deed-registration-everything-you-need-to-know/
- https://cleartax.in/s/gift-deed-format
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