Find out how to apportion your property among legal heirs so that it does not cause problems later on.
A large number of senior citizens face the problem of dividing their house or residential property among children or legal heirs while drafting a will. The normal tendency is to divide the house room-wise or floor-wise. This may not always be the right approach to apportion a property.
Consider an 800 square yard property comprising two storeys, jointly inherited by two brothers. They divide the property between themselves, with the ground floor and half of an outhouse going to one brother, while the first floor, second floor and the other half of the outhouse goes to the other brother.
The brother who owns the first and second floors and half the outhouse makes a will for his legal heirs comprising his wife, son and two daughters. He bequeaths the house to his wife, who would have a lifetime interest in it, and thereafter, it would be inherited by his children.
The first floor would be divided into two portions. While one half would go to one daughter, the other half would go to the other daughter. The second floor would be inherited by his son. His portion of the garage would be divided equally between the two daughters. The first floor, with the servant’s quarter, would be inherited by the son.
This is a normal approach followed by most parents who own a house, but this type of division can create problems for legal heirs. The friction surfaces when there is a subsequent requirement of reconstruction or sale of property, or while apportioning a percentage of ownership for the purpose of taxation, etc. To avoid such a situation, here are some simple steps for splitting the property.
Apportioning a percentage of overall ownership:
The owner must first determine his share in the entire property. In this case it is 50%. The next step is to apportion his ownership share to his children or legal heirs. Taking the above case as an example, the possible appropriation of the property could be as follows.
The son gets 40% of his father’s share of the property, which would come to 20% share of the ownership of the entire property. Each of the two daughters would inherit 30% of his half of ownership share, that is, 15% of the ownership of the entire property. This will save the heirs or beneficiaries a host of problems, besides determining the portion of property being inherited by each person, along with the corresponding floor area ratio (FAR), floor space index (FSI), etc.
Division of constructed assets:
Having decided on the division of ownership, the next step would be to indicate that the property has been built and is to be divided for the use of legal heirs in the manner mentioned earlier (as per the division of floors).
However, in case of sale or reconstruction of the property, or division of property, or for the purposes of taxation, the ratio of ownership as mentioned above would be maintained. So the son would be 40% owner of his share or 20% of the entire property, and each daughter would be 30% owner of his 50% share, or 15% owner of his entire property.
How to mention the split of property in a will
The above guidelines are specifically with regard to the portion/clause of the will pertaining to the division of house. This could be written in the will as follows: “Property No. 120, Ram Bagh, New Delhi, 110025*: The details of the above mentioned property, of which I have inherited a 50% ownership share, are described in para xyz. I bequeath this property to my wife, Radha Mehra*, and she will hold and use it in her lifetime, but will not alienate the same by way of sale, or mortgage, or gift, or will it to any other person.
My wife, Radha Mehra, can use the property for residential or commercial purposes, or enjoy the rental for the same in her lifetime without any let or hindrance. In case the family circumstances warrant, she can also sell or mortgage the property to any other person with the prior written approval of my children, Sanjay Mehra, Anjali Mehra Kapur and Anita Mehra Khanna*. After my wife, Radha Mehra, the said property will be inherited by my children, Sanjay Mehra, Anjali Mehra Kapur and Anita Mehra Khanna in the manner indicated below:
Son (Sanjay Mehra): He would inherit 40% of my half share of the property, which would amount to 20% share of the ownership of the entire property.
Two daughters (Anjali Mehra Kapur and Anita Mehra Khanna): Each of the two daughters would inherit 30% of my half of ownership share of the property, that is,15% of the ownership of the entire property. As the property has already been constructed and is in use and occupation, the existing property would be inherited by my children (or their legal heirs) for use and occupation in the manner prescribed below:
The entire second floor of the house, along with the second floor of the outhouse, will be inherited for use and occupation by my son, Sanjay Mehra.
Half of the first floor, along with half of the garage of the outhouse will be inherited by my daughter, Anjali Mehra Kapur, for her use and occupation.
Half of the first floor, along with half of the garage of the outhouse, will be inherited by my other daughter, Anita Mehra Khanna, for use and occupation.
To ensure that there are no hazy notions about the partition of the first floor and the garage between my two daughters, a sketch has been appended along with the will, indicating the partition line of the two partitioned portions.
However, in case of sale or reconstruction of the property or division of the property for any purpose, including taxation, the ratio of ownership as given in para xyz will be maintained. The son will be 40% owner of my share of 50%, or 20% of the entire property, and each daughter will be the owner of 30% of my 50% share, or 15% owner of the entire property.”
*The names of colony and persons are only for illustration purposes.
(THE AUTHOR IS AN APPROVED VALUER, SPECIALISING IN PROPERTY MANAGEMENT (VALUATION & TAX). THE VIEWS ARE PERSONAL.)