Monday, December 9, 2019
India has a majestic and colorful culture, and with 80% of the country's population belonging to Hinduism, they generally believe in reincarnation. They also believe that there are not the owners to any wealth that they have acquired, but rather more akin to caretakers of those assets. When a member of the family passes away, a place at the dinner table can be set for them for months and even be included in annual reports. So when a person dies intestate in India, a mission of ownership of assets for that individual begins.
Many Hindu families use a unique tax system called the Hindu undivided family (HUF), mentioned in the 1961 Income Tax Act. A HUF is a group of persons lineally descended from a common ancestor and would be considered a single "person" for assessment purposes, and thus would only need to file one tax return. It can wrongly create the impression that all the property belonged to the family collectively, and thus perpetrate the belief that a will is not needed for these assets
A 2018 report from wealth advisory firm BAF Consultants said 97% of Indian families with significant businesses had no succession plan in place. Through the courts the succession process has evolved with the Hindu Succession (Amendment) Act 2005, which among many things the Act provided that daughters would inherit the same as sons. But these new regulations are no substitute for a thorough and detailed will.
See Shruti Advani, Indians Must Set Aside Fears of Death — and Write Wills, Financial Times, December 3, 2019.
Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.