The Private Client team at Cyril Amarchand Mangaldas shares their comments and opinions in an article in the following Q&A which was published by the Mint Newspaper on 12th February, 2022 and the online edition of the same can be found here.
A person wishes that his property after his death be given to a memorial trust or a cancer hospital. At present, he wishes to have his house with him for stay during his lifetime. Is there any way by which he can make some kind of nomination so that his house (after his death) could be given to the cancer trust to be used by people visiting Mumbai for treatment?
We assume the property in question is solely owned, self acquired, where the person has full legal title to transfer it as they deem fit. As one potential approach, it would be advisable to identify a suitable existing NGO, charity or cancer hospital etc. which can potentially use the property, and understand from them what they will require in terms of usage etc. Here, once this understanding is reached, the person can bequeath the property to the said entity in his Will with explicit instructions on how the property is to be used as identified. The charity/NGO etc. may have certain compliance conditions in place which may affect their ability to receive property as a donation, and hence this conversation should be had well in advance. The timing between the preparing of the Will and the actual transfer happening post the demise of the person could be extensive as well, and hence this requires long term planning. With careful structuring under the Will, the said charity or the like can be named as the beneficiary of the property, with instructions on how the same is to be used.
Alternatively, if the person wishes to have more control and direction on how exactly the property is to be used, they can consider setting up their own charitable trust under their Will itself, and appoint suitable family members/ friends as trustees to set up and administer the same. The property can be left to this testamentary trust under the same Will, and applied for the usage specified e.g. a cancer hospital. The charitable trust can be set up during the person’s lifetime, and then the property left to the charity under his Will.
In either option, the property will only be transferred after the death of the person, and will go as per the instructions mentioned in the Will. Hence, it would be advisable to consult counsel to understand how to structure this.