Want To Make a Will or Transfer Property as a Gift?
If you are planning to transfer your immovable property to your legal heirs, there are two options at hand – either at will it, or to make a gift. However, the differences between a gift and will are not fully understood by many. One may need to know about will and gift of immovable property as below:
- Gift and will/testamentary succession are transfers that are gratuitous in nature – that is, they do not involve payment/receipt of any money in lieu of the property being transferred/inherited.
- Under both gift and will, transfer of immovable property can only be affected by the execution of an instrument in writing. For smooth transfers, it is important that both these written instruments (i.e., gift deed and will) contain a clear and unambiguous description of the property being transferred as well as personal details such as name and individual share of transferee/s.
- For a gift to take effect, the process of gifting must be completed within the life time of both donor and donee. However, inheritance of property under a will only comes into effect on death of the testator.
- A gift deed of immovable property requires payment of stamp duty and compulsory registration with the competent authorities. An unregistered gift deed does not pass any title of ownership of property in favor of the donee. On the other hand, a will does not require payment of stamp duty and registration fee is optional. In fact, a will can even be handwritten on plain paper.
- A donor does not usually have the right to revoke/cancel the gift made at a later stage at his mere will. In stark contrast, an individual can revoke his earlier will and replace it with an amended will, any number of times during his lifetime. The will that was last executed shall be considered as his final will.
- In certain territories of India, it is compulsory to obtain probate of a will before any distribution of assets of the deceased mentioned in the will. A probate refers to the legal process in which the court of ad judicature certifies the authenticity of the will. However, no such certification of authenticity is required from the Courts for a gift deed.
Knowing all the differences in different modes of transfer is helpful in deciding which mode of transfer best suites the situation.