Sairamkumar (Manager) 05 August 2012

Gift property to parents

Hello Everyone

I'm new to this forum and need your help and feedback for this post. My case is different and unusual.

I'm working in usa and have been sending money to my parents to build a house at my native place. Since I didn't have enough money to buy the land, my father has helped me and gave almost half price of the land and for the rest of the money required, I arranged a loan from an Indian bank. My father never asked me to give in writing for the money he has given me. Then, I availed a big loan in chunks to build the home completely. My father has worked hard, a to z to complete the home without anyone's help. The home was ready in 2007. Then, after a year, I got married. My wife is from a lower middle class family. My wife's family didn't seem to be compatible with our family and my parents didn't like my wife and her family's behaviour ever since I was married. They lie a lot and never fulfilled their promises from the beggining. So, I didn't like them as well. Currently, the property is in registered on my name and I paid all the loans 2 years ago. Now, because of all these family problems, my parents are feeling insecure and asking for the money my father gave me, else, give full rights to live and enjoy the income from the property if any thro' out their life. I'm interested in giving them the whole property to them and register it on my father's name. I need to know if my wife can claim any share on this property if (I die), (or) (my wife or I file a divorce) and kick out my parents. My parents don't have any income or any other savings. Remember, this property we built is before my marriage. What other problems my wife or her family could make on this property?

My father has enquired few local lawyers. We got mixed information. One of them said, I could do a gift settlement to my father and being in a foriegn country, I can't come in person to do this. So, I can give a power of attorney to my brother to sign on my behalf and register the settlement locally. The second lawyer said that, One additional step is required, that is, I need to get the settlement agreement from India and register it in usa with a Oath commissioner and then send back the settlement agreement to India and register it locally with a power of attorney (my brother) signature. So, the second lawyer said one additional step which I think is really complicated. Anyone has any idea how to do this? Please advise.

Reply Follow

5 Replies

Yudhish Padman S (Advocate (Madras High Court) 9566217446) 05 August 2012

The former advise is a better one.

Execute a General Power of Attorney in favour of someone (other than your Parents) who you could trust.
Notarize it at your Domicile.
Send it to India and make sure it is registered in Book IV.
Ask your Power Agent to execute a Gift Deed in favour of your Parents.
Ask your Parents to execute a Will in your favour and register the same as well.

Step 5 is to ensure that the Property devolves back to you in the event of your Parents' demise. Failure to comply that step would result in the Title of property being shared by all surviving legal heirs.

If you do as aforementioned, your Parents could not be kicked out no matter whatsoever happens. But be aware that your Parents shall have absolute ownership over the Property and do with the property as they please and there is nothing you could do about it.

Sairamkumar (Manager) 05 August 2012

Hello Sir

Thanks for your reply. I would like to know the following:

1. What is Book IV, and registration of Power of Attorney in the Book IV.

2. Should my parents register the will (or) just write and keep it with them and give me a copy. Because, We would like to keep the will confidential, and the will registration would get revealed public when someone requests a EC on the property. What are the advantages and disadvantages of registering a will. Also, can my parents cancel the will anytime when they are alive?

3. Assuming we continue to keep the property on my name: It's my property bought using my hard earned money. Currently, If my wife seeks a divorce, what kind of claims can she make on this property. Can she make claim a share on this property?

Yudhish Padman S (Advocate (Madras High Court) 9566217446) 05 August 2012

Dear Sir,

What I supposedly wanted to say was that your notarized Power of Attorney is valid only after Registration. Need not go too deep into procedural aspects and details. Your Advocate and the concerned Registrar will take care of it.
You need not register the "Will", it is optional. Please take notice that even if the "Will" is registered, it would not reflect in EC normally. I cannot discuss the advantages & disadvantages since it is a wide subject. And YES, your Parents can Cancel the "Will" anytime when they are alive.
Assuming as aforementioned, your wife cannot claim share on this property. But do not get your hopes high. There are for worse scenarios that you had failed to assume.

I strongly advise that you contact your Advocate (particularly someone who knows you/your family well) in person or by Phone and act according to his/her advise. That would be more effective and problem solving.

Sairamkumar (Manager) 05 August 2012

Thanks for the details. My father has already contacted the lawyers and preparing the documentation. I wanted to check with someone in this forum to know what are the possible scenarios and how to mitigate them.

Would like to keep you posted and discuss the results. I will.

Thanks again.