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HomeBusinessA family settlement agreement offers a hassle-free solution

A family settlement agreement offers a hassle-free solution


We are two brothers and one sister. In the function of our parent’s demise, we brothers stand to inherit some immovable assets and we program to shell out some quantity to our sister in settlement. What is the ideal way to execute this?

⁠— Identify with held on request

 

We assume that the immovable property in issue is self-acquired and not coparcenary home/Hindu undivided family (HUF) house. We assume that the relatives associates are in alignment with your proposal. If so, the relatives could take into account a family settlement for the asset(s). The framework of the relatives settlement arrangement (FSA) could envisage either a transfer of the home to the brothers for the duration of your parents’ life span (which would be exceptional), or upon their demise (vide their respective Wills). The to start with selection will bring in stamp obligation and registration fees, although the second solution does not. The next solution only comes into effect upon the father or mother(s)’s demise, while the initial can be undertaken immediately. But the next option does crystalize the rights between all of you. It is really worth exploring this with your legal professional.

In both scenario, your sister would be supplied a monetary settlement quantity as consideration below the FSA and for renouncing her prospective legal rights in the home. To ensure alignment with the FSA, your mother and father must also simultaneously execute their respective Wills to document their intention to bequeath the house in favour of you and your brother only, and the payment of the dollars amount to your sister in lieu of the house. Registering the executed Wills with the registrar may possibly be helpful. Supplied that the method of amending a registered Will can frequently be procedurally cumbersome, it could dissuade your moms and dads to alter their Wills on an impulse later. In the function their Wills document a opposite bequest in regard of the residence, the executed FSA (and the thing to consider transferred thereunder) will give you powerful grounds to obstacle the validity of the bequest.

Rishabh Shroff is companion, Cyril Amarchand Mangaldas.

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