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In this article, Jagdish Kaisare discusses All you need to know about Intestate Succession

Who is an “heir”?

The Black’s Law Dictionary (9th Edn) explains heir to mean a person who, under the laws of intestacy, is entitled to receive an intestate descendant’s property.  The Oxford English Dictionary (Indian Edn) defines the word heir to mean a person legally entitled to the property or rank of another on that person’s death.

What is “succession”?

In common parlance, succession means inheritance. Upon death of a person, succession follows.  The Constitution of India via Entry 5 in List III recognizes the personal laws and deals with areas like marriage, divorce, adoption, partition, intestacy, succession etc. Thus, either the State or Centre is competent to legislate on areas falling within the ambit of personal laws.

In most cases, The Hindu Succession Act prescribes the rules relating to succession applicable to Hindus, Sikhs, Buddhists, Jains etc. It extends to majority of the Indians. Next is the Sharia Law which is applicable to Muslims. Then is the Indian Succession Act which applies to Christians and other persons not covered by the Hindu Succession Act and the Sharia Law.

Intestate Succession

In a dynamic and diverse country like India, succession is a very tactful issue. It may either be

  1. Testamentary succession – one with a will; or
  2. Intestate succession – one without a will.

A will is basically a declaration expressing the desires of a person with regard to his estate and provides for its transfer upon his death. A person is said to have died intestate with respect to an asset that he has not disposed under a will, or the disposition under the will is not capable of taking effect either on account of invalid bequest or illegal bequest. Intestacy may either be total or partial.

In the event a person dies intestate, his/her assets are distributed as per the mandate of the Indian Succession Act. The vesting of the assets takes place under the relevant personal laws. However intense complexities arise when there is more than one heir, given the fact that some assets are more lucrative than their counterparts.

Who can make a claim?

In order the make a claim, one requires either a letter of administration or succession certificate issued by the court.

Letter of administration is an instrument granted by a competent court in order to distribute the assets of the deceased among his heirs. They can be acquired by filing a petition in a district or high court.

Succession certificate, on the other hand, is issued to a person claiming the authority to inherit debts, securities and any other movable assets. A succession certificate sets forth who the legal heirs of the deceased are. Obtaining a succession certificate gives the person concerned only the right to distribute the assets of the deceased under the relevant personal laws.

Succession Certificate may be obtained in the following circumstances

  1. Where probate or letters of administration are not required;
  2. Where the deceased is a Mohammaden or a Christian
  3. Where the deceased is a Hindu who has left a Will.
  4. Where joint family property of a Hindu Family is involved.

Procedure for obtaining a Succession Certificate

  1. Approach a competent district court and file a succession certificate petition.
  2. The petition should contain vital details like the name of the petitioner, name of all heirs of the deceased, the petitioner’s relationship with the deceased, etc. Generally, a death certificate is attached along with the petition.
  3. The Court reviews the petition and then issues a notice to the relevant parties, and also in the news requiring objections to be raised. If, within the time frame allowed, no objections are raised and the court is satisfied, it may pass an order to grant a succession certificate.
  4. In the succession certificate, the Court shall specify the debts and securities contained in the application, and may thus, authorize the person in whose favour the certificate is issued to either receive interest/dividends or to negotiate/transfer the securities or to do both.

In alternative to the succession certificate, a legal heirship certificate may be obtained. It sets for the relationship of the heirs with that of the deceased. It is used for claims relating to pension, provident funds or other service benefits of the central or state government. It is not conclusive and has a limited scope. The legal heirship certificate is generally issued by the revenue officers like tahsildars or talikdars.

Intestate Succession among Hindus

The Hindu Succession Act, 1956 was passed to amend and consolidate the law relating to intestate succession among Hindus. It extends and applies to all the persons who practice the religion or who are defined as Hindu’s (Buddhists, Jains and Sikhs) under the legal regime. The act was further amended in 2005. As per the provisions of this Act, if a Hindu male dies intestate then the following persons can make a claim:

First Claim: Class I legal heirs. They have equal rights to the assets.

They are mother, spouse and children. If any child has died, then their children and spouse have an equal share;

Second Claim: In the absence of Class I heirs, the Class II heirs can make a claim. They are, father, sibling, living children’s grandchildren, sibling’s children etc.;

Third Claim: In the absence of Class I and Class II heirs, the Agnates can make a claim. Agnates can be defined as the distant blood relatives of male lineage (fathers’ side).;

Fourth Claim: In the absence of Class I, Class II heirs and Agnates, the Cognates can make a claim. Cognates can be defined as the distant blood relatives of female lineage (mothers’ side).

In the case of a Hindu female the following persons can make a claim:

First Claim– the sons and daughters and the husband can make a claim;

Second Claim– In the absence of the first claimants, the heirs of the husband can make a claim;

Third Claim– In the absence of the first and second claimants, the mother and father can make a claim;

Fourth Claim- In the absence of the above-mentioned claimants, the heirs of the father;

Fifth Claim – And even in the absence of the heirs of the father, the heirs of the mother can make a claim.

In the case a Hindu dies intestate and without any heirs as above-mentioned, the property devolved to the State Government under due procedure of the law.

Intestate Succession among Muslims

In case a person governed by the Mohammedan Law dies intestate, the following persons can make a claim: sharers and residuaries.

Sharers are basically those heirs entitle to a certain specific share whereas Residuaries are those that acquire the remainder of the property.

In the absence of sharers and residuaries, a class of persons known, as Distant Kindred can make a claim to the property of the deceased.

Intestate Succession among Christians

Section 32 of the Indian Succession Act, 1925 provides that a Christian’s legal heirs are husband, wife or the kindred of the deceased.

Consolidation of Assets

In case of intestate death, there are complexities in getting on record all the assets that the person owned. Consolidation of the assets and formulating an effective plan to protect them is a very critical step. Then, the next step is to approach the institutions and get the assets released.

In case of Movable Assets

Movable Assets are basically property of any description except immovable property. They include assets like jewelry, cars, bank balance and investments made with financial institutions. They follow the law of domicile of the intestate at the time of his/her death.

Process

In case of bank balance and investments, the KYC form requires a nominee. if the name of the nominee is provided for at the time of investment, the financial institutions will release the funds to the nominee mentioned in the form.

A nominee is, by nature a trustee of the funds, who is entrusted with the responsibility to safeguard the funds till the legal heir is determined. In case there is no nominee, then the person making claim will be required to produce a succession certificate.

Once the movable assets are consolidated, the letters of administration or succession certificate may be obtained from the competent court by a person making a claim to the assets.

In case Immovable Assets

Immovable Assets are basically property in the nature of land, building, etc. They follow law of situs that is the place where the property belongs. In the event the title is not disputed, the heir can get the ownership changed at the relevant district authority that has jurisdiction over the property.

Process

In the first instance, the heir/heirs will have to ensure that there are no pending debts.

Then, upon confirmation of the ownership of the property, the next step is to apply for mutation of the property. Mutation essentially updates the government records. The application for mutation is made with a local authority. The sub-divisional magistrate would have jurisdiction in case a challenge is preferred. In case of multiple heirs, the mutation order would contain the names of all the heirs. In such case, in my opinion, it would be better to mark the division of property among them at the time of mutation itself to avoid unforeseen consequences.

Recently, the Delhi High Court in the matter of Harish Chander Gupta & Others v. Rakesh Gupta & Others, [2018][1] has observed the following, “if a person dies after passing of the Hindu Succession Act, 1956 and there in no HUF existing at the time of the death of such a person, inheritance of an immovable property of such a person by his successors-in-interest is no doubt inheritance of an ‘ancestral’ property but the inheritance is as a self-acquired property in the hands of the successor and not as an HUF property although the successor(s) indeed inherits ‘ancestral’ property that is, a property belonging to his paternal ancestor.

Conclusion

In order to avoid the complications and consequences of intestate succession, the people in India should adopt to estate planning. Estate planning has multifold benefits such as, it avoids any dispute within the family, guarantees smooth transition of assets from the deceased to the heirs, protects the wealth of the deceased, promotes better tax planning etc.

[1] Harish Chander Gupta & Others v. Rakesh Gupta & Others [2018] DHC (Delhi High Court), p.1444.

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