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Author Topic: Distribution of Proceeds of Property Sale Among Inheritors  (Read 1161 times)

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Offline dorchit

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My father died in 1988 without leaving a will. He had, with his own money, constructed a residential property. Inheritors of this property comprise my mother and 3 sons (including me) and one daughter who are all alive presently.

The property was being used by mother and son/s & their families at various times all these years with the full consent of all the inheritors.

All inheritors have now agreed that the property should be sold. The daughter has expressed that she does not want any share in the proceeds from the sale of the property. The mother and 3 sons would like to have the sale proceeds to be shared in the ratio 10:30:30:30.

Is this possible as per prevailing laws and if yes, what kind of a legal agreement is required to be executed by all the five inheritors?

What is the Wealth Tax implication for each of the beneficiary and the best way of dealing with it to minimize the incidence of Tax?

Offline saravanan.s

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Re: Distribution of Proceeds of Property Sale Among Inheritors
« Reply #1 on: May 13, 2015, 03:51:13 AM »
since your father had died intestate the class 1 heirs are eligible to inherit his property.that includes his mother,wife and children.as per your case i assume that his mother is not alive.so each of you will get 1/5 share in the property.if the daughter doesnt want any share in the property then she has to relinguish her rights in the share through a registered relinguishment deed which means the remaining will get 1/4 share in the property.if your mother wishes to give part of the property then she can gift it to you all in whatever proprtions she want but before that she got to mutate her share in her name

Offline dorchit

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Re: Distribution of Proceeds of Property Sale Among Inheritors
« Reply #2 on: May 13, 2015, 11:41:01 PM »
Thanks, Mr Saravanam, for your prompt response and advice.

Won't it be simpler to draw up one single signed Agreement with legal validity among the 5 of us - Mother, Daughter and 3 Sons stating that we all agree to division of proceeds of the sale in the ratio - 10:0:30:30:30?

If this is possible, what is the actual process involved - value of stamp paper, witnesses required etc.

I would also like to have advice on how best to meet tax liability on the sale income for each of us.


Offline saravanan.s

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Re: Distribution of Proceeds of Property Sale Among Inheritors
« Reply #3 on: May 14, 2015, 02:33:35 AM »
yes alternatively if all the family members are agreeing for a amicable settlement then you can go for a family settlement.engage a lawyer to divide the property as per each of your family members wish and then register the family settlement deed for its not valid in the eyes of law if not registered.as far as your sister is concerned i think she must produce an noc or release deed (whichever your lawyer suggests) to relinguish her rights.

Offline dorchit

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Re: Distribution of Proceeds of Property Sale Among Inheritors
« Reply #4 on: May 15, 2015, 01:53:46 AM »
Thanks again, Mr Saravanan!

We are yet to engage a lawyer. As such, can you kindly clarify as who is the Registering Authority for the Family Settlement/Agreement.

I assume this should be drawn up on a Non-judicial stamp paper of suitable value and should be signed by all the five of us and witnessed by 2 witnesses. Please confirm.

 

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