My property includes my share in the property or asset that I own with others. Generally, I am free to transfer my share while I am alive, or to give it away in my will.
If I have inherited an asset (without a will), my share is indicated in the law. If my brother, my sister and I have inherited an asset from my mother, and we are Hindus, I have one-third share in the property, whether I am a man or a woman. This is given in the Hindu Succession Act 1956.
If my brother, sister and I have inherited an asset under a will that gives 50% share to my brother, 30% to my sister, and 20% to me, I will have 20% share. If the will does not state shares, the three of us will have equal shares.
It does not matter even if only my brother’s name is recorded in government or official records of the asset. I do not lose my share because my name is not recorded .
In both circumstances, I can transfer my share when I am alive. I can also give it to anyone in my will.
I will discuss later about my share in ‘HUF’ property.
If I have purchased an asset with two other persons, my share in that asset is my property. But what is my share?
Let us suppose our contribution to the price of the asset is as follows: Rajeev : 50%, Anita : 30% and me : 20 %. We may have done this by making independent payments to the seller, or by contributing these amounts to a common fund from which we paid the seller.
- At the time of purchase, the three of us can decide what will be our shares. We can agree that our shares will be equal even though our contribution is not equal. We must take tax law related advice in the matter.
- If we have not agreed in this manner, our share will be in the proportion of our contribution. Thus Rajeev will have 50% share, Anita will have 30% share and I will have 20% share in the asset.
- But if there is nothing to show our contribution, we have equal share in the asset.
Rule 2 above will usually be applied.
These rules generally apply in the same manner to any asset that I have acquired jointly with my spouse. If I have paid the entire price of the asset purchased, but my wife and I have purchased it in joint names, I am the full owner of the asset. But I will need her consent if I want to sell it during my lifetime. Likewise, I can give the whole asset by making a will. But any claim made by my wife after me will complicate issues.
Whether to purchase asset jointly with my spouse, or also with my children, is a decision to be taken after carefully considering all advantages and disadvantages.
I can transfer my share when I am alive. I can also give it to anyone in my will.
Joint bank accounts and investments
Amounts held jointly with banks or financial corporations, and in any joint holdings in investments, follow the same rules. If my salary is credited into a bank account that I jointly hold with my husband, I am the full owner of the amount. Adding my husband’s name is a matter of convenience if the account is held in ‘either or survivor’ mode. It is a matter of control if it is held in ‘all or survivor’ mode.
Holding funds or investments in joint names on ‘either or survivor’ basis has advantages. If I hold such funds or investment jointly with my wife, my wife can recover the amount after me, or can deal with the investment. She will not need court orders to do so. But she will not ‘own’ it after me. She will only collect it, and she must distribute it to all those who inherit my properties.
Legal and tax advice
I must take legal and tax advice while acquiring assets of large value in joint names.
– Nilima Bhadbhade