How to protect your property and wealth?
Some of the rich families in India run a family business. Also, we are aware of the differences that at times creep up when the families manage their big business. The difference in investment strategies, ideologies, marriage, etc., can actually affect the way assets are being treated. Thus, how do the wealthy households’ manager their property and assets? The concepts, especially in the west like prenuptial agreements, are valid and common. Such isn’t the case in India. Here is a look-
Resorting to trusts
An estranged wife or husband cannot claim advantages from assets registered with the trust. In this way, assets do remain within the bloodline and can’t be divided among others. The trustor provides the trustee the right to actually hold the property owners and assets for advantages of the beneficiary. Such trusts legally protect the assets, cuts down the paperwork as well as the effort as inheritance and estate taxes while the trustor’s wish when it comes to the distribution of the prioritized wealth.
Trusts could be revocable, irrevocable, funded or non-funded.
The will to the rescue
Of course, the more the wealth, more pressure to resort the will. Especially, when it comes to the divorces, the industrialists at times ensure that the consequences of the divorce don’t upset the financial interests. Thus, a will may name the grandchild but not the daughter-in-law. This certainly, in no way means that she is discriminated. Instead, there are numerous cases where the non-transferable life interest in the real estate assets made for daughter-in-law especially in case of troubles.
Similarly, sons-in-law may also be protected.
What actually goes wrong in a HUF?
If the wealthy families resort to the succession as it is done in case of the Hindu Undivided Family, there are chances of the fall-out. Reportedly, there have been cases where daughters demand her share in the property. This erodes the business interests as well. Thus, wealthy families seek guidance from the legal advisors who chalk out the plans to make sure that family wealth is not violated or usurped in the case of the early fall-out of the marriages. Care is of course taken that kids born in such wedlock have a lot of protection.
What happens to prenups?
It is still rare in India. Prenuptial agreements aren’t valid in a court of law in India. Also, note that violated the agreement, however, has been stamped as well as notarized constitutes fraud and could be the ground for divorce.
Generally, the prenups agree upon the alimony as well as the maintenance to be provided to either the spouse in case marriage fails. The custody of the children, distribution of responsibilities, liability if these happen to have the kids out of the wedlock and other financial aspects are put down in the prenuptial agreement.