By Accommodation Times News Services
King Lear of William Shakespeare’s play decided to gift his properties to his three daughters during his lifetime on condition that he would like to hear from their own lips that they loved him the best.
The oldest daughter declared that she loved her father more than words could give out, that he was dear to her than the light of her own eyes and dearer than life and liberty.
Then he demanded what his second daughter had to say. She declared that she found all other other dead in comparison with the pleasure, which she took in the love of her dear king and father.
He then turned to his youngest daughter whom he called his joy. He asked what she had to say thinking no doubt that she would give pleasure to his ears with the same loving speeches that his two elder daughters has just uttered. But to his surprise he could only hear from her that she; loved the majesty king according to her duty neither more nor less.
The youngest daughter then told her father that he had giving her breeding and love him, that she returned those duties back as was most fit and did obey him, love him and most honor. She felt that the handsomeness thing for her to do is to love and be silent.
The King was so angry about the plainness of the third daughter’s speech that he could not decide truth from flattery. In a rage of resentment, he took away the third part of his estate which he had reserved for his third daughter to be shared equally between his first two daughter and their husbands leaving virtually nothing to him for his old age retirement.
King Lear wished that his hearty gift would be answered with deeds of love form his two elder daughter. But within the first month of receiving
such fabulous estate, the old king began to find out the difference between their promises and performance.
He now observed that whenever he wanted to talk to his eldest daughter, she would fain sickness or anything to get rid of him. She regarded her ex king to be a useless burden. She therefore refused to obey him by pretending not to hear him. She also had the boldness to say that his staying in the palace with the knights was creating an useless and expensive establishment. His second elder daughter wanted the kind to beg to her by kneeling down on his knees for food, clothing and shelter.
The king now realised his foolishness of gifting his estate based on mere flattery. But it was too late. He soon became stark mad till he died of utter desperation.
This great play ‘King Lear’ teaches a lesson that you must never gift your estate to your sons, relatives, near and dear ones out of love and affection during your lifetime. Ofcourse you can give gifts in the form of cash and jewellery with the hope to see that your married daughter lives happily at the in-laws place. But in this circumstance, the wife must take care not to enter into a gift agreement for gifting her estate to her husband. She should also see to it that she does not have joint bank account with her husband of her estate she received from her parents.
An ideal way to gift your estate whether you are married or single is to bequeath it through wills and Probate. Therefore you shall now have guidelines on how to manage your estate through Wills.
WHAT CONSTITUTE AN ESTATE
First before having guidelines, you should know what constitute an estate. Most people believe that estate consist of land and building owned by landlords. They believe that as a member of a co-operative housing society is merely a shareholder and allottee of that society, the property belongs to the Managing Committee. Therefore the members are not the owners of their flat or condominium property.
Now although it is true that lands and buildings owned by landlords
are estate, for all practical purpose all properties owned by individuals, partners and companies are estate of those owners. Thus a flat of a co-operative housing society owned by the members is an estate of that particular members even though that co-operative housing society is managed by the managing committee. This member continues to be the owner of his estate even though he may have kept his flat unoccupied as he could be residing somewhere else in another property. The member also continue to be an estate owned if he has given out his flat to a stranger on eleven months leave and license basis based on a written agreement.
Therefore the estate consist of all assets and liabilities owned by you or jointly with someone else. These assets may be real property , tangible personal assets and intangible personal assets. The Real Properties are land, building and things permanently attached to the land such as trees.
The tangible personal properties and assets are those possessions you can se and touch. This includes jewellery in the forms of gold, silver and diamonds (not imitation jewellery or american diamond jewellery as they have no value in the market), machinery such as typewriter, calculators and computers, motor car, sporting goods, furniture and fixtures and artworks such as paintings and drawings.
The intangible personal assets are those property you cannot see it but you have denoted ownership possession through written agreement paper. These assets includes stock certificate, shares of private and public limited company, saving and fixed deposits account, life insurance policies corporate bonds such as mutual bonds and investment in unit trust, patent and copyright to you through royalty agreement with the publisher without assigning that right to the publisher or any other publisher and the book is under publication, than such an intellectual property becomes your intangible personal property during your lifetime and fifty years after death.
The liabilities of your estate are those you agreed or incurred out of personal agreement or consideration like loans from banks and financial institutes like HDFC Bank, mortgage on land and property and capital and interest amounts due to creditors.
Therefore it is absolutely for the purpose of liability that the proposal made by the other person should be accepted and agreed upon by you. If not, then it does not become a binding contract. Thus when a proposal is made by the managing committee of incurring huge property repairs over Rs. 25,000 on private and secret agreement is not accepted by you, then you have every right not to assent or agree to such a bogus tender by voting against this resolution in writing. Then in such circumstances you estate does not become a part of your liability even though your name has appeared in the outstanding liability account of the society auditor’s report.
Now in such circumstances, it would be better that you deny this liability also through the Will drawn upon by you in the future to give proper information to the beneficiaries who would inherit your estate.
Therefore upon your death, your estate will go to the beneficiaries (they are the persons who are designated to receive income and assets mentioned in your Will). So you shall now have elements of Wills and Probate to help you to take effective decisions for managing your properties or estate effectively. But before you come to know about proper administration of the estate of the deceased, you should know the provisions of the new model bye-laws framed by the Commissioner of Co-operation and Registrar, Co-operative Societies dated 2nd July 2001.
Co-operative Society provisions concerning transfer of the property of the deceased.
Under Section 34 of the bye-laws of the Co-operative Housing Society Ltd Flat owner/Plot Purchased Type, The transfer of shares and interest of the deceased member shall be transferred to the nominee in the capital property of the society. This section further states that the nominee shall file an indemnity bond in the prescribed Appendix No. 15 and 18.
Section 35 provides that where a member of the society dies without making a nomination or no nominee comes forward for the transfer, the society shall invite within one month ( from the information of his death) claims or objections to the proposed transfer of share and interest of the deceased member through exhibition in the notice board of the society and also publishing such notice in atleast two local newspaper.
The provision further states that after making such inquiries, the committee shall decide as to the person who in its opinion is the new or legal representative of the deceased member. Such a person will be eligible to be member of the society provided he gives an Indemnity Bond along with his application prescribed in Appendix 16, 17 and 19 of the new model bye-laws.
Appendix No.17 asks for some private and secret information from the heir like age, occupation, monthly income and so on which is no business of the society to ask for such private and secretive information.
Now a person may not have nominated a person for various reasons like dispute, divorce, separation and so on. This does not mean that a person who has not nominated anyone cannot make a Will. Now even if he has not made a Will, the Letter of Administration from the High Court. Therefore the entire provisions No. 34 and 35 is in direct contravention to the provisions of the Indian Succession Act.
The real and proper thing for the society to do is to accept probate or letter of administration of the deceased person and then transfer his or her estate to the beneficiaries as per the decision of the High Court. This would be a correct position in law. Therefore section 34 and 35 should be amended and obtaining indemnity bond should be omitted.
You shall now have information about managing the estate through Will.
What is a will and what precautions you should take in drawing up a will.
Every rational person desires that the estate he has owned after years of hard toil and intellectual effort goes to the right type of people of his choice after his death. He further wants that the rightful person called beneficiaries acquires his estate with the least cost when they inherit such estate. He also desires that the two main things, which constitute respect to a dead person mainly his or her reputation and estate must be fulfilled. An effective tax planning further provides that every Testator or Testatrix (man or woman owner of estate who makes a Will and Codicil) and beneficiaries are
entitled to get the maximum benefit of all tax exemptions and incentives so as to legitimately pay the least amount of tax as provided by the law.
There are many ways of doing this effective estate planning. And most effective component of an estate plan is the Will.
Basically a Will is a legal document signed by you and witnessed by two persons who also signs on the same page after you have signed the document giving explicit directions as to who or what is to get whatever specific assets of yours you wish to list. Each of the two witness should be atleast 18 years of age who like the testator is sufficient competent to know what he or she is signing. Further the two witnesses must not be executor and beneficiaries of the estate although the witness can be an attorney, advocate or lawyer himself and one other qualified person preferably a graduate in his or her office. Now your two witnesses can be anybody else like your manager, accountant, clerk, doctor or nurse.
Your Will should also mention the name of an adult executor or executrix (the female term of executor) not less than 18 years of age whose duties is to carry out its provisions and instructions so as to distribute your estate as set forth in the Will to the beneficiaries.
Now once you have made a Will, you have every right to make any changes or amendment to the Will for whatever reason y simply making a phone call to your attorney. However you must not make changes in the Will itself like for example deleting the name Ramesh and replacing it with Rajesh. For any such changes in the Will after it is executed will make the Will invalid.
Therefore to make a valid change on your Will, you should either execute a Codicill or prepare a New Will. A codicil is a separate sheet of paper making certain changes or amendment to the last Will and Testament of the estate owners (the world Testament means a disposition or distribution of personal property to take place after the owner’s death according to his witnesses and bears the same conditions of validity as in the Will. Your codicil must be short and simple reflecting amendment like changing your executor from one person to other.
However if you have to make changes like rearranging your assets and yours beneficiaries, then it is better that you prepare a new valid Will.
After undergoing the burden of drawing up a Will, you will have many doubts before you like what will happen if your Will is contested by unknown persons thereby not passing of your estate to the rightful beneficiaries after your death. What if the executor turns out to be a rogue and rascal who instead of dutifully administrating the estate of the deceased, mismanages the estate and then pass on the proceeds of the estate to his incompetent, useless and unemployed son for rendering accounts for 10 years? What happens if the executor constantly enter into secret and shady deals which is difficult to be proved in the Court of law ? Now you can take precautions to both these problems of contesting the Will and appointing the executor at the time of drawing up the Will.