Will or Settlement Notes

 Will or Settlement

How should you leave your assets behind?

A person can leave his assets to his/her blood relative or anyone either by a deed of Will or by a deed of Settlement or by forming family trust.

Deed of Will is a Testamentary document i.e. it will take effect only after the lifetime of the maker of that Will, called Testator.

Whereas a Deed of Settlement (to the family members) is instant document to take effect immediately on the execution of that deed. 

Whereas a Deed of Settlement (outside the family members), which is otherwise called a ‘Gift deed’ and it is also a kind of settlement.

Deed of Will

Will is a testamentary document (i.e. it will take effect only after the lifetime of the maker of that Will).

Privileged Will is a kind of Will, applicable to members of the Army, Airforce, and Naval forces, while they are in the warfare.

Unprivileged Will is a kind of Will, applicable to all others, i.e. the general public.

Only a Hindu, or a Christian can make his Will and bequeath (dispose) his properties (either movable or immovable or any other transferable assets).

A Muslim cannot make a Will and bequeath his entire property, but only his 1/3^rd share, that too, with the consent of all the other sharers, as per the Shariat law (Muslim law).

Will with Executor:

A Hindu, or a Christian can make his/her Will and thereby bequeathing his/ her properties to the legatees (beneficiaries) through his/her named Executor. The said Executor, after the death of the Testator (maker of that Will), would disburse / distribute the properties as per the terms of the said Will.

If there is no Executor appointed in the Will, the legatees (beneficiaries of the said Will) can themselves disburse the properties as per the terms of the said Will.

Will Executed in Madras City:

The Indian Succession Act 1925 is applicable to the Indian Christians regarding succession of the property of a Christian, who died intestate (i.e. died without any Will).

The Indian Succession Act 1925 provides certain provisions in case of an Indian Christian or a Hindu who had executed his Will within the City of Madras (i.e. if the Will related property situate within the original jurisdiction of the Madras High Court. That is, the old 100 divisions of the Chennai Corporation area).

Probate of a Will:

If an Indian Christian or a Hindu executed his/her Will and thereby appointed an Executor or many Executors, and such property situate within the old Madras City, then such Will should be produced before the Madras High Court and get it proved and to get a Probate order of that Will. Probate means to prove the execution of the Will and to prove the competency of the maker of that Will (called Testator).

If the Will does not contain any Executor, but that property situate within the old Madras City, then any one of the Beneficiaries of that Will, shall make an application before the Madras High Court, to get a “Letters of Administration of the Will”. It is also the same as in probate, by proving the said Will before the Court.

Mufassil Will:

If the property situate outside the old Madras City area, such Will need not be produced before any Court for any probate or letters of administration. But if any dispute arises, then such Will is to be produced before the concerned District Court and get it proved, through the witnesses of that Will.

Settlement deed:

Sec.126 of the Transfer of Property Act 1882 provides Gift of any property to anyone. 

This section applicable only to Hindus, and Christians. It will not apply to Mohammadens. Mohammadan gifts are called Hiba. Hiba is a Urdu word, and it means gift. As per Mohammedan law, i.e. Shariat law, the gift of property should be immediate one, i.e. the title of the property should transferred in the deed itself and possession also should be handed over on the day of gift itself. 

But in the case of Gift/ Settlement by a Hindu, or a Christian, handing over possession may be postponed to a later date or even after the lifetime of the Settlor/donor.

Settlement and Gift difference:

If the gift of property to the family members, it is called Settlement or Family Settlement. If the gift of property to any other third parties (apart from family members), it is a Gift. Therefore, gift and settlement are synonymous. 

Who are all Family members?

As per the Indian Stamp Act, 1899, the following persons are considered as ‘family members’ to the Settlor, viz, father, mother, husband, wife, son, daughter, grandchildren, brother, and sister. But all the other blood relations are not considered as family members.

Settlement in-presenti

The Settlement called as “in-presenti settlement” which means the Settlor (or the owner of the property) settled and passed on the title of the property to the Settlee on that Settlement deed itself. It is like that of a sale deed, in which the title passes to the buyer immediately.

Conditional Settlement:

Per contra, some Settlement deeds, though the title of the property (ownership of the property) is transferred to the Settlee in that Settlement deed itself, the possession of the settled property is retained by the Settlor himself for his lifetime or for the lifetime of his/her spouse. Here, the title alone is passed on the day of Settlement, but the delivery of possession is postponed to a future event.

Muslim Settlement or Hiba:

Whereas in a Muslim settlement, it is called a Hiba, both title of the property and the delivery of the possession of the property shall take effect in the settlement deed itself. It cannot be spitted as in the case of Hindu settlement. 

That is only difference between a Muslim Settlement or a Hindu/Christian settlement.

Difference between Settlement and Will:

Generally, in Settlement, title and possession would pass on the deed itself. In some case, though title passes immediately, possession would take after some event (i.e. after the lifetime of the Settlor).

But in the case of a Will, both title of the property and the possession of the property would take effect, only after the death of the maker of the Will, called Testator.

Suppose, in a Settlement deed, the Settlor postponed the title as well as the possession to take effect after his/her lifetime, then it is called a Will, though the name given to the document is ‘as if a Settlement deed’. The nomenclature (the name) does not define the deed, but only the contents (recitals) decide it.

**