The Private Client team at Cyril Amarchand Mangaldas shares their comments and opinions shared in an article in the following Q&A which was published by the Mint Newspaper on 31st March, 2021 and the online edition of the same can be found here.
I got married to a widower with an adopted girl, who is now 25 years old. The property is in the name of my husband, who’d told me that he had explained to the daughter that I would get the property after his death and then to her as she is the only child. The house we stay in is in his name, with the nominee being his daughter. He is not taking initiative to discuss or make both of us secure. Please advise the best course of action. She neither wants to get married nor take up a job.
— Name withheld on request
We have assumed you and your husband are Hindu by faith and that the adoption of the daughter was in compliance with the provisions of the Hindu Adoption and Maintenance Act, 1956. We recommend you consider discussing the execution of a will, coupled with implementing certain lifetime financial planning methods (to provide you and the daughter a degree of financial security). Executing a will is a fairly simple process. A will can be executed on plain paper with two attesting witnesses present during the signing. it does not need to be compulsorily registered and, hence, there is no need to approach a government authority. If your husband does not execute his will in respect of his estate, upon his demise, his assets will be subject to intestacy provisions—his estate would go to his Class I legal heirs, which include you, the adopted daughter and your husband’s mother (if she is alive). Each of you would inherit an equal share. In many cases, this is not the ideal state of affairs, and would create co-ownership rights over all such properties—making it very difficult to deal with such properties in future e.g. in case one party wants to sell it to a third party.
While we note that the adopted daughter is listed as the nominee of your residential property, ownership title to such property would devolve only upon the legal heirs (either under a Will or under intestacy). She would merely be an interim caretaker of the asset and not own title to such asset, in which she may only have a partial ownership stake.
In case there is resistance to execute a will, we suggest your husband explore implementing certain lifetime financial planning methods. These could be in the form of lifetime gifts from your husband to you/ adopted daughter of liquid cash, shares, investment portfolios or life insurance policies. You may consider the possibility of becoming a joint account holder for any existing bank accounts held solely by your husband. If your husband’s estate is spread across assets (real estate, mutual funds, direct equity shareholding and jewellery) you may consider establishing a simple lifetime trust structure wherein your husband can be the trustee of such assets during his lifetime (giving him a sense of ownership) and you and the adopted daughter could be named beneficiaries. However, if your husband’s estate is fairly simple, a trust structure may not be needed.
Ultimately, your husband’s cooperation to execute any of the said suggestions would be absolutely critical.