A Will or a gift during your lifetime are both ways to transfer your assets to anyone, including your children. It is true that both modes have advantages and disadvantages. The purpose of this article is to help you decide which option is best for you.
There is no restriction on the transfer of assets by anyone who has the legal capacity to do so.s to anyone else. In order to enter into a contract, a minor, a person of unsound mind, or an involuntary bankruptcy insolvent must be of sound mind. During the course of the person giving the gift, you can give a gift in the name of a living person who must acknowledge the gift during the course of the person giving the gift.
Gift deeds for property transfers
Transferring ownership of the asset as a gift will allow the receiver to benefit from the asset right away. You can gift any property that you own to anyone under the Indian Contract Act, provided it is not disputed. Real estate receivers can be anyone over 18 who is of sound mind. Property can be given away with a gift deed.
Keep these points in mind
The following points should be kept in mind before making a gift deed
- You can give a property gift during your lifetime
- The receiver of the gift becomes the owner of the property once the gift is accepted.
- A gift deed must be registered.
- For the change of ownership, fees and stamp duty will be charged by the administration based on the value of the property.
- Close relatives do not have to pay taxes on gifts they receive.
- If you give real estate worth more than INR 50,000 to someone who is not an immediate family member or relative, the recipient will have to pay tax on the gift.
- Transfers of property are final and cannot be reversed.
Wills for the transfer of property
A Will provides that possession of a property can only be transferred after the death of the person who is implementing the Will to transfer the property, as opposed to a gift deed. The current law prohibits entering a will or charging stamp duty on it.
After someone dies, assets can be inherited in two ways. A deceased’s assets will be distributed to his relatives according to his successor’s terms without a will. Those named in a will will acquire the deceased’s assets if he or she leaves one. A legal heir will inherit the assets that are not protected by the will if the deceased’s will does not cover all of the assets.
Under Hindu succession law, there are no restrictions on a person giving his assets to anyone to the exclusion of his beneficiaries. Muslims, however, cannot leave more than one-third of their assets in a will.
The Most Important Points to Remember
Consider these points before making a Will
- Even though registration is not required, it can enhance transparency and reduce the risk of future litigation.
- People who receive property through a Will do not have to pay taxes on it.
- In the event of the recipient’s death, possession of the real estate passes to the recipient’s successor/s according to the laws of the land.
- A Will can be changed or revoked at any time during a person’s lifetime.
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Gift Deeds vs. Wills: Which Is Better?
In order to determine which option is best for you when transferring property, it is important to understand the fundamental differences between a gift deed and a Will.
In cases where you want the receiver to benefit immediately from the property transfer, a gift deed is an excellent option. If the property is to be transferred to the receiver after the death of the owner, however, a Will is an excellent option.
A gift, however, is the only way to assist someone who needs help immediately. A transfer of an asset through this method should only be used when the asset must be transferred immediately. You may find yourself in a difficult situation if you leave all or a substantial portion of your assets to your beneficiaries during your lifetime. These incidents must have occurred frequently around us. We still remember the case of an industrialist living in a rented house, for example.
In addition, transferring assets solely to reduce your taxes is a bad idea. In order to save a few amounts in taxes, you should not give up control of your assets. If you want to avoid future litigation in the future, gifting as a mode of asset transfer is recommended. Keep in mind that you should never give away a significant portion of your wealth while yoWith a Will, you can give away a portion of your assets while leaving the remainder to your heirs through the remainder of your life. a Will.
A will is a good idea if you want to ensure that your assets pass to the people of your choice after death and if you want to experience and control those assets during your lifetime. Your legal beneficiaries should inherit your assets after you die if you want to maintain a smooth inheritance process. Nevertheless, if you want to help someone who needs urgent assistance, you must make a gift. When deciding whether to use a will or a gift deed, it is wise to consider all aspects.