The following article was first published in the Mint newspaper on 29th June, 2022. The same was written by our Private Client team at Cyril Amarchand Mangaldas, who frequently publish their comments and opinions in the Mint. The online version of the article can be found here.
I am the sole owner of a plot of land. Can I write a joint power of attorney to my two sons so as to enable them to sell or register that by mutual agreement and later share the amount?
— Name withheld on request
It is possible for you to give a joint power of attorney to your sons to enable them to sell the property and receive the proceeds thereof. However, such a power of attorney under which the right to sale is proposed to be given to the attorneys will require stamping on the market value of the property and registration.
You may want to think about agreeing clearly with your sons on the sharing ratio of the amount, to avoid any disputes in the future. We assume the ratio will be 50:50, but it would be important to have this documented in writing.
You can think about a Will leaving the said land to your sons equally (or any other ratio)—obviously, this is a longer-term proposition after your lifetime, but this is more cost-effective (depending on the quantum of stamp duty payable as above). You can consider gifting them the property as well, during your lifetime. A discussion with your attorney would help you understand the range of options, and their pros and cons.
I want to bequeath the money in my Employees’ Provident Fund (EPF) to my son. In the unfortunate event of my death, is this amount protected against my son’s liability?
— Pankaj
As per the provisions of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, the amounts standing to the credit of a member in the EPF are protected from attachment under any decree or order of any court in respect of any debt or liability incurred by the member prior to his death.
Accordingly, as per your will, your son will be entitled to such amounts from your PF account. However, this will not be protected against any liability incurred by your son pursuant to your demise. In other words, such protection is limited vis à vis your liabilities, and will not extend to your son’s liabilities after it has passed to him.
We, however, recommend that your son be made the nominee under the EPF scheme to ensure hassle-free transfer of the money.