My friend will be the executor of my Will after I die. I am also planning to leave a few assets for him. Can a Will be challenged if the executor is a beneficiary as well? What else can I do as I don’t want any of my relatives to be the executors?
We are assuming that you are a Hindu. As per the provisions of the Indian Succession Act, 1925, there is no restriction on an executor of a Will also being a beneficiary under that Will. It contemplates bequests to an executor, and Section 141 provides that if a legacy is bequeathed to a person who is named as an executor of the Will, he shall not take the legacy unless he proves the Will or otherwise manifests an intention to act as an executor. Hence, there is no restriction in one person being named as the executor as well as the beneficiary of a Will.
However, as a practical matter, we do not recommend that the same person be named as the beneficiary as well as an executor. If for any reason, the named executor cannot act as the executor, or does not show an intent to do so, the bequest being made to such person in the capacity of a beneficiary shall not be valid. If you do not wish to include any other relative or friend as an executor of the Will, you may also consider appointing a professional or a lawyer as the executor. This is a safer approach, as it avoids the risk of conflict of interest and mitigates challenges from other beneficiaries. You can appoint more than one executor as well to ensure that the responsibility is shared suitably between a combination of external executors and your friend.
I am planning to prepare my Will. Should it include my insurance policies, fixed deposits and mutual fund investments that already have nominees?
Your Will should detail all the property you own—immovable or movable, tangible or intangible. It is recommended that you execute a comprehensive Will, which covers your entire estate and your succession objectives. If you have assets in multiple jurisdictions, it is recommended to execute a Will in each jurisdiction. We also recommend including a “residual estate” clause within the Will which would state that any properties which have not been specifically mentioned in your Will but are owned by you, and that any future properties acquired by you would also form a part of your estate. Hence, these would also get captured and devolve as per your Will.
Further, in relation to the rights of a legal heir versus that of a nominee, courts have consistently held that the rights of a legal heir supersede that of a nominee. Accordingly, we recommend that the accounts held in your name also be bequeathed under your Will to the same person. We would recommend including a complete schedule of your investments and bank accounts within the Will, and naming both the nominees and beneficiaries in the Will to ensure no conflicts arise in the future.
Can a person be a karta of two Hindu Undivided Families (HUFs)?
Yes, there is no restriction placed under the Hindu law which prohibits the same person from being a karta of two HUFs at the same time. A karta is usually the eldest male coparcener of an HUF. For example: Suppose, A and his three sons B, C and D are part of an HUF and B is the eldest son. B has a wife and two children of his own. Upon the death of A, B would become the karta of his father’s HUF. He would also be regarded as the karta of a small HUF being formed by B and his two children. As a practical matter, each HUF would be treated separately for tax purposes, and the succession to each HUF would need to be handled distinctly.
Rishabh Shroff is partner, Cyril Amarchand Mangaldas. Queries and views at [email protected]