To will or to gift ?
Find out which mode of transfer works for you when you make an inheritance plan When making their inheritance plans, many individuals ask whether they should make a gift of their property or whether they should bequeath it under a will. To make this decision, it is helpful to understand the main similarities as well as differences between the two modes of transfer. The similarities For both a gift and a will, the person receiving the property is not required to pay any money in lieu of the property being gifted/inherited as both these modes of transfer are gratuitous in nature. Also, the donor’s/ testator’s intention can only be validly effected by the execution of an instrument in writing, clearly specifying the donee/beneficiary and details of the property being gifted/inherited. A valid gift can only be made by execution of a valid gift deed. In the absence of a written will, inheritance of the property will be governed by rules of intestate succession under one’s personal laws. The differences First, while inheritance under a will only comes into effect upon the testator’s death, a gift of a property takes effect within the lifetime of both donor and donee. Second, payment of stamp duty and registration fees is compulsory on a gift deed. However, no stamp duty is payable on a will and registration of a will is optional, too. In fact, one can write a valid will even on plain paper. Third, one can modify, alter and revoke the inheritance scheme in one’s will at any time, as many times as one requires. The will which has been last executed will be considered as the final will. However, in a gift of immovable property, a donor does not usually have the right to revoke/cancel the gift already made at his mere will.
The table on the right helps you make a choice if you are working on an inheritance plan and cannot decide whether you should go in for a gift or a will. The decision to choose one of the modes of transfer of property depends on family dynamics, nature of property to be transferred and unique facts and circumstances.
Hindustan Times, New Delhi, 23-03-2013