Given the alarming COVID death rate in the past year, there have been increasing concerns for rights of inheritance and succession in India. As family members are lost to the pandemic, it begs the question; what about succession planning and business continuity?

Amongst families, many businesses, both big and small have suffered the consequences of the pandemic. In these testing times, it has been of utmost importance to be aware of the right to inheritance pertaining to property, debts, titles, obligations to another person upon the death of an individual. In addition, reports also suggest that family partition is caused by the lack of sensitization about inheritance laws and legal knowledge around the same.

In essence, inheritance can be defined as the act of passing down or transferring the property to a descendant upon the death of a relative. Inheritance rights in India are  acquired by the devolution of property upon the legal heirs of a person upon his death through will or by way of the present laws of succession. The prevalent laws of succession in India vary under different religions and societies.

It is utmost important to be aware of the legalities surrounding inheritance and succession. At the same time, recognizing a legal heir is vital as they are the subsequent issues related to sudden deaths, insurance claims and inheritance of assets.

As per the legal principles for distribution of assets, an individual can inherit or succeed to the property in the following two ways;

  • Testamentary Succession

The presence of ‘Will is crucial in this case and the act of succession is achieved with the help of the said Will. The ‘testator is the person who has created the Will and the ‘legatee is the person in whose favour the Will has been made. The deceased person should have left a valid and enforceable ‘Will’ to the legatee.

  • Intestate Succession

In this regard, a Will is absent. If the deceased person has not left behind a valid Will, then the property will be distributed among the legal heirs. This act of inheritance is done via the intestate succession laws. An heir is known as the person who is entitled to succeed the property of the intestate.

The two modes of succession are governed by the following Acts in India:

  • The Indian Succession Act, 1925

The Indian Succession Act, 1925 governs the laws that apply to testamentary succession and intestate succession of certain individuals who are not Hindu, Muslim, Sikh or Jain. It permits anyone to legally transfer their property to any person with the means of a drafted will.

Under the Indian Succession Act, 1925, a will is a testament and a legal document that declares the desire of a person, pronouncing the proper distribution of assets to the legal heirs. Under the act, the will is a legally binding indication of the testator’s motive for disposal of his property once they are deceased. It details the names of one or more persons who shall inherit the assets/property after the death of the person.

It is also critical to recognize the types of property that are liable to be inherited.

  • Ancestral Property which can be defined as the inherited property of the deceased which is older than 3 generations or more.
  • Self-Acquired Property which is the property belonging to the deceased and which has been secured in his/ her lifetime. An individual can without any limitation make will as for the property that is acquired by him.

 

As per Sec. 32 of the Act, following are entitled to the Property in the event that a person has died intestate and governed by the Indian Succession Act, 1925:

  1. Wife or Husband of the deceased
  2. Kindred

The Act also provides rights, shares and order of inheritance in different situations.

The Hindu Succession Act, 1956

The Hindu Succession Act, 1956 amends and codifies the inheritance laws in India for Hindus, Buddhists, Jains, and Sikhs. It regulates and provides a comprehensive legal framework for succession of Hindus in India. This law of succession regulates the inheritance in the absence of a will, i.e. intestate succession of Hindus, Sikhs, Jains and Buddhists. It lays out different classes of heirs on whom the property of deceased devolves upon his death.

  • The following class of heirs are listed in the Act:

Class I Heirs:

  1. Widow
  2. Daughter
  3. Son
  4. Mother of the intestate
  5. Heirs of pre-deceased son of the intestate (including the widow, sons, daughters of the predeceased son)
  6. Heirs of pre-deceased son of pre-deceased son of the intestate (including the widow, sons, daughters of the predeceased son of the pre-deceased son)
  7. Children of pre-deceased daughter
  8. Children of pre-deceased daughter of pre-deceased daughter
  9. Children of pre-deceased daughter of pre-deceased son

Class II Heirs:

  1. Father
  2. (1) Son’s daughter’s son
    (2) Son’s daughter’s daughter
    (3) Brother
    (4) Sister.
  3. (1) Daughter’s son’s son
    (2) Daughter’s son’s daughter
    (3) Daughter’s daughter’s son
    (4) Daughter’s daughter’s daughter.
  4. (1) Brother’s son
    (2) Sister’s son
    (3) Brother’s daughter
    (4) Sister’s daughter
  5. Father’s father; father’s mother.
  6. Father’s widow; brother’s widow
  7. Father’s brother; father’s sister.
  8. Mother’s father; mother’s mother.
  9. Mother’s brother; mother’s sister.

 

  • When a Hindu male passes away, then the succession is as follows;
  1. The Class I heirs receive an equal amount of share
  2. If there are no Class I heirs, then it will be equally divided amongst people in any one entry in Class II heirs.
  3. In absence of Class, I or Class II Heirs, the property will be divided amongst the Agnates and then the Cognates.
  4. If any of the mentioned heirs don’t exist, then the property will be given to the Government. This process is known as Escheat.

 

  • In the case of a deceased Hindu female, the property will be divided first;
  1. To her husband and children
  2. Then between her husband’s heirs
  3. Later, between her father and mother
  4. Later, between the heirs of the father
  5. Later, between the heirs of the mother
  • Who are Agnates?

The male blood relations of the deceased such as bother’s son, brother’s daughter, son’s son

  • Who are Cognates?

These are the female blood relations of the deceased such as sister’s son, sister’s daughter, daughter’s son

Apart from defining who is entitled to be legal heir and the related provisions, the law also provides a separate detailed procedures for inheritance and succession. The procedures established in the laws are to be followed to successfully claim the succession to a property.