A 55-year-old unmarried woman residing in Pune faces a crucial estate planning decision concerning her substantial ₹15 crore wealth. With no direct legal heirs, she aims to distribute her assets between her two nephews and a charitable foundation dedicated to educating underprivileged girls while preventing potential legal challenges from her younger brother who lives in the United States.
Understanding the Legal Landscape Without Estate Planning
According to Neha Pathak, Executive Group Vice President and Head of Trust and Estate Planning at Motilal Oswal Private Wealth, the woman's situation requires immediate attention. Under the Hindu Succession Act, her brother would automatically inherit her entire estate since she has no children, spouse, or surviving parents. This includes her ₹8 crore bungalow and ₹7 crore in financial investments, all presumed to be self-acquired properties with no other claimants.
The legal expert emphasizes that without proper estate documentation, the woman's wishes to benefit her nephews and support girls' education would remain unfulfilled. Her brother, as the closest Class II legal heir, would receive everything by default under Indian succession laws.
Creating a Legally Sound Will: The Fundamental Approach
The simplest solution involves executing a professionally drafted Will that clearly outlines her distribution intentions. The document should specify exact portions of both the bungalow and investments allocated to each nephew and the chosen charitable foundation.
Pathak recommends several crucial steps to strengthen the Will against potential disputes. The Will should be registered with the sub-registrar in Pune, though registration isn't mandatory legally. This process enhances the document's authenticity and reduces challenge risks. Additionally, the Will must be executed in the presence of two reliable witnesses and include a clearly defined executor who understands their responsibilities.
The Will should contain unambiguous beneficiary details, complete property information, and bank account specifics. Including a brief explanation of her decisions demonstrates clear intent and helps prevent misinterpretation. The executor can also be authorized to liquidate assets and distribute proceeds according to her wishes.
Establishing a Private Trust for Enhanced Protection
For more comprehensive estate management, especially concerning the charitable component, Pathak suggests creating a private trust during her lifetime. This involves transferring investments and the bungalow into the trust's name while she maintains control as the initial trustee.
While transferring assets to the trust triggers no income tax implications, the bungalow transfer requires stamp duty payment. Upon her passing, the trust's designated trustees—either individuals or a professional trustee company—would manage and distribute assets according to the trust deed without going through probate court.
The trust structure offers privacy, avoids probate delays, and significantly reduces legal challenge risks. Within the trust deed, she can specify fixed percentages or corpus amounts for her nephews, with the remainder dedicated to the educational charity for underprivileged girls.
Securing Her Legacy Effectively
Both estate planning approaches require professional execution to ensure her wealth distribution vision becomes reality. Combining proper documentation with legal safeguards enables her to support both family members and social causes while minimizing potential interference from her brother.
The comprehensive strategy ensures that her ₹15 crore estate benefits the intended recipients exactly as planned, creating lasting impact through family support and educational philanthropy for underprivileged girls across India.
