Protection of Family Assets in the Trying Times of COVID

When death hits closer to home, it is accompanied by an ancillary ramification apart from emotional and psychological distress – finances. Many families have had to confront this reality as the pandemic left a trail of deaths across the country. Apart from grappling with insurmountable pain, one is often saddled with time-bound financial formalities, asset management and planning.Family businesses have been gravely impacted due to the COVID situation and it has acted for a wake-up call for planning the protection of valuable assets. 

Financial planning is a step-by-step process that is designed to meet fiscal requirements at every milestone of one’s life. For instance, creating a fund for children’s education, investing in retirement planning etc. The aim is to build a corpus of sufficient funds over a period of 15-30 years of continued investment and planning, which enables one to sustain financial responsibilities in these events. Another aspect of asset planning is setting up a contingency fund, which is most relevant and crucial in the present scenario of sudden deaths and unanticipated health emergencies. 

Lack of a structured plan can lead the family into chaos which may further result in litigation, a scenario not alien to many unsuspecting families today. This article aims to assist you through this dilemma by constituting an exhaustive list of tasks and legal measures one can undertake to ease the workload and formalities in such circumstances.

Documents and Immediate Actions for Families

The first step should be the collection of all documents, essential for dealing with various government and financial institutions. If the deceased had conducted a majority of transactions online, it is essential to secure access to their online accounts, with account numbers and login passwords.

The second step is securing the death certificate. In India, all deaths have to be mandatorily registered within 21 days of demise. If the same is done within 21-30 days, a penalty of INR 25 is charged. The certificate has to be certified by the medical officer. After 30 days and up to a year, the joint director of statistics is authorized to issue the certificate. The application has to be filed with a fine of INR 50 and an affidavit. After a year, the certificate is only issued by an order of a first-class magistrate, an application form which has to be accompanied by a “cause of death” certificate, cremation certificate, and an affidavit. The death certificate is vital for every financial task that has to be conducted in pursuance of the asset and financial management of the deceased.

Once all the above-mentioned documents and details are organized and collected, one can move forwards with the following tasks;

  1. Try to find out if the deceased person made a Will while they were living. A Will exponentially eases the process of transfer of assets, since most of the confusion is put to rest.
  1. Next, the efforts must be directed towards assessing the deceased’s liabilities and loans (secured/unsecured). This includes home, vehicles, personal loans or credit card dues. In such cases, the first step should be informing the creditor about the demise. In case the borrower had a co-signor/joint debtor the latter shall repay the loans. In the case of a single borrower; if a Will is in place, the executor shall be responsible for settling the debts, in the absence of a Will, an administrator (typically the   is appointed by the court to repay the liabilities.
  1. The heirs or children of the deceased (if adults) can undertake a mature discussion about the distribution of assets. The family must try to unite to avoid litigation. If possible, appoint a trustworthy person to carry out the necessary legal obligations.
  1. Take stock of all the assets in the name of the deceased and make a list with the valuation. Even if the deceased made a Will but left out a property that they later acquired, the property will be distributed according to intestate laws. i.e., the personal law of the individual.
  1. When it comes to insurance, deposits in banks, and shares of the deceased, in most cases, nominees are appointed. Notify the financial institutions of the death of the person and make inquires for the procedure to be followed by the nominee.
  1. In the event of the demise of both parents, where are minor children involved, it is essential that a guardian be appointed for them. If not appointed by a Will, in the case of Hindus, a guardian may be appointed by the court.
  1. Hire a local attorney to advise you. Keep in mind that laws in India relating to succession are not uniform. Moreover, legal procedures to get the appropriate documentation differ from state to state. Hence, it is recommended to hire someone who is well-versed with the local laws of the state in which the deceased resided or where they owned property.

Future Planning for Protection of Assets of a Family Business

People usually start thinking about protecting their assets only once they reach their late 40’s and 50’s. The ongoing pandemic has been a much-needed reality check which has triggered the families and individuals to structure their assets and finances for unforeseeable circumstances, even young adults.

What can you do to protect your estate in your life so that your assets are distributed according to your wishes?


  1. Will: Having a Will in place would make your life as well as the life of your loved ones quite simple. There is no fixed format for a Will under the law. The only requirements for a valid Will according to the Indian Succession Act, 1925 are; it should be made by a sound adult, signed by them, and attested by two witnesses. It is recommended that an Executor be appointed in the Will to reduce hassles. It is not compulsory to register a Will. Probate is also required only if the Will is made in Bengal, Bihar, Orissa, and Assam and within the local limits of the ordinary original civil jurisdiction of the High Courts of Madras and Bombay or where the property of the deceased is situated in these areas.
  1. Trusts: A trust may be created during the lifetime of a person who is called the author/s It may be created with a written legal document through which the assets of the settlor are placed into a trust and trustees are appointed therein who manage these assets for the benefit of the settlor and the beneficiaries named in the Trust Deed. The settlor can also be one of the trustees or the managing trustee of the trust during their lifetime. This gives them control over their assets while they are still living. The biggest advantage of Trust is that it operates both during and after a person’s life.
  • A provision can also be made in the Trust Deed for the appointment of a guardian for minor children in case both the parents die. The Trust Deed may provide instructions regarding the administration of the property to take care of one’s children.
  • A written Trust Deed is signed by the Settlor, requires a minimum of two trustees and two witnesses. The trust may or not be registered; registration is required only if an immovable property is transferred to the trust.
  • When a settlor dies, the trustee pays the debts, files the tax returns, and distributes the assets of a deceased. Trusts are an effective estate planning tool if one wants to avoid the costs and hassles involved in obtaining probate. It is a quick and quiet procedure, preserving one’s privacy and done without any court interference.
  1. Guardianship: Where minor children are involved, it is very important to make provisions either in a Will or by Trust, for appointing a guardian for minor children in the event of a death. If one parent dies, then the other living parent becomes the guardian. If both parents die, then it is needed to mention who will be accorded guardianship. Failure to do so will involve the intervention of courts and various applicable laws given India’s pluralistic society. The need for an appropriate guardian is to provide for personal needs but to also ensure that any future assets to be inherited are protected during the period of minority.

How does Ownership of Assets Transfer after the Death of a Person?


There are two scenarios that are to be considered while determining the ownership of the assets after the death of a person:

  1. In case a person dies leaving a Will; or
  2. In case a person dies without leaving a Will

Where there is a Will

Leaving behind a validly executed Will is the most uncomplicated mode through which a property can pass to the next owner. If an Executor is appointed in the Will, they should apply for the probate of the Will where Probate is mandatory. Once a Probate is obtained, the Executor is responsible for paying off all the debts of the deceased, managing the expenses for all the properties, and distributing the assets to all the beneficiaries according to the Will of the Testator.

Where there is No Will

The ownership of the property will be determined by intestate succession i.e succession according to the personal law applicable to the deceased individual. The heirs will be determined in accordance with the religion of the intestate for example Hindus, Buddhists, Sikhs and Jains will be governed by the Hindu Succession Act, 1956, Muslims will be governed by the Mohammedan Law and all others will be determined by the Indian Succession Act, 1925.

What are the legal options available to the heirs of the deceased?

  • Letters of AdministrationSection 273 of the Indian Succession Act, 1925 provides for Letters of Administration which are granted by the court to the individual who volunteers to be the administrator with the consent of the legal heirs for the lawful distribution of assets of the deceased. The purpose of grant of Letters of Administration is only to enable the administrator so appointed by the court to collect/assimilate the properties of the deceased and to deal with the various authorities with whom the properties of the deceased may be vested or recorded and thereafter the same be transferred in the names of the successors in accordance with the law of succession applicable to the deceased. The administrator during the proceedings is required from time to time to file the accounts in the court with respect to the administration of the estate of the deceased.[1]
  • Succession Certificate: Succession certificate entitles the holder to inherit the moveable assets of the deceased and to make payment of a debt or transfer securities to the holder of certificate without having to ascertain the legal heir entitled to it. A Succession Certificate is not granted where Probate or Letters of Administration are mandatory to be obtained. The purpose of a succession certificate is limited in respect of debts and securities such as provident fund, insurance, deposits in banks, shares, or any other security of the central government or the state government to which the deceased was entitled.
  • Family Arrangement: Family arrangement resolves present or possible future disputes among family members ensuring equitable distribution of property among the family members.[2] In a Family arrangement, a member gives up all claims in respect of all the properties in dispute other than the ones falling to their share. The rights of all the others are recognised. Therefore, under a Family arrangement, members of a family may decide amongst themselves about the distribution of the property of the deceased. A Family arrangement would have to be appropriately stamped and registered. However, even oral arrangements are valid in the eyes of law.
  • Administration Suit: Order 20, Rule 13 of the Civil Procedure Code, 1908 deals with an administration suit that is filed by a person seeking administration of the estate of the deceased. It is resorted to when there is no amicable settlement of disputes amongst the family members of the deceased. Under the decree, distribution of the assets of the deceased amongst the heirs can be sought along with the administration. In an administration suit, the court takes upon itself the function of an executor or administrator and administers the estate of the deceased. The suit in its essence is one for an account and for application of the estate of the deceased for the satisfaction of the debts of all the creditors and for the benefit of all others who are entitled.
  • Partition: In the case of Hindus under the Hindu Succession Act, the co-parceners may claim for a partition of the property. Under the Mitakshara law, the partition of a joint estate consists of defining the shares of the coparceners in the joint property. Once the shares are defined there is a severance of the joint status. Therefore, all that is required for a partition to take place is a definite and unequivocal intention by a member of a joint family to separate himself from the family. An actual division of the property by metes and bounds is not necessary. It may be declared orally or by an agreement in writing or by instituting a suit for partition of the property in the court. The difference between family arrangement and partition is that any member of the family can enter a family arrangement, but partition can only take place between co-parceners.


Not only have the consequences of the pandemic made protection of assets a top priority for most individuals but it has also encouraged people to ensure the protection of their assets through a Will or a Trust. The primary reason for this change in approach can be owed to India’s pluralistic society which sets limitations on estate and succession rights and adopts the regime of forced heirship in some cases of intestate succession. Additionally, the time-consuming and tedious process for completing the transfer of assets when the courts get involved has also facilitated this shift in individual priorities.


[1] Ramesh Chand Sharma V/s State & Ors  (High Court of Delhi, Test. Cas. 66/2011, Date of Decision: 20.01.2015, Coram: Indermeet Kaur, J.)

[2] Kale & Others vs Deputy Director of Consolidation 1976 AIR 807

Image Credits: Photo by Matthias Zomer from Pexels

Not only have the consequences of the pandemic made protection of assets a top priority for most individuals but it has also encouraged people to ensure the protection of their assets through a Will or a Trust. The primary reason for this change in approach can be owed to India’s pluralistic society which sets limitations on estate and succession rights and adopts the regime of forced heirship in some cases of intestate succession.


Highlights of the Changes to the Indian FDI Policy

The Ministry of Commerce and Industry has issued Press Note 4 of 2019 dated 18th September 2019[i] (“Press Note 4”) to bring changes to the Foreign Direct Investment (FDI) Policy pertaining to Coal Mining, Manufacturing, Single Brand Retail Trading and Digital Media to attract foreign investment into India, increase productivity and enhance competitiveness.


The Ministry of Commerce and Industry has issued Press Note 4 of 2019 dated 18th September 2019[i] (“Press Note 4”) to bring changes to the Foreign Direct Investment (FDI) Policy pertaining to Coal Mining, Manufacturing, Single Brand Retail Trading and Digital Media to attract foreign investment into India, increase productivity and enhance competitiveness.


Following are the amendments in Foreign Direct Investment in India made by Press Note 4:


  1. Coal Mining:


To draw independent miners and help raise investment and output, 100% FDI is now allowed under the automatic route for coal mining activities including associated processing infrastructure (coal washery, crushing, coal handling, separation) for sale of coal. Earlier, 100% FDI was permitted only in captive coal mining. This would help attract international players to create an efficient and competitive coal market.


Further, coal and lignite mining activities for captive consumption and coal mining activities, including associated processing infrastructure, would now be governed by the Coal & Mines (Special Provisions) Act, 2015 and Mines and Minerals (Development and Regulation) Act, 1957 as against the erstwhile Coal Mines (Nationalization) Act, 1973.


  1. Contract Manufacturing:


The move allows 100% FDI in contract manufacturing. Therefore, manufacturing activities may now be undertaken by the investee entity through self-manufacturing or through contract manufacturing under a tenable contract, whether on Principal to Principal or Principal to Agent basis. This provides much-needed clarity for third-party manufacturers and would boost domestic manufacturing. Earlier there was ambiguity on whether contract manufacturing was to be considered as ‘manufacturing’ or a ‘trading activity’ for FDI purposes because companies only sold products after getting it manufactured from someone else. Further, the revised FDI policy now allows contract manufacturers to sell products manufactured in India through wholesale and retail channels, including through e-commerce, without the government’s approval.


Implication on entities trading in Food Product: Now food products manufactured through contract manufacturing and trading by the same manufacturer will fall under Automatic Route and not under the 100% Approval Route. There was no clarity on the same earlier.


  • Single Brand Retail Trading (SBRT):

Key changes pertaining to SBRT entities include:

  • SBRT entities can now set off mandatory sourcing requirements with the sourcing of goods from India for global operations. Earlier it was allowed only for the initial 5 years. This would give an impetus to export and result in increased production as well as enhanced competitiveness.
  • SBRT Entity can now operate through e-Commerce without having a brick and mortar store, provided a brick and mortar store is opened within 2 years from the date of the start of the online trade.


  1. Digital Media:


Now uploading/streaming of news & current affairs through Digital Media has been restricted to 26 % FDI under the government route. Earlier, FDI capping existed only for print media (26%) and TV Channels (49%). In fact, digital media companies had 100% FDI as per section 5.2 (a) of the DIPP guidelines[ii]:


“In sectors/activities not listed below, FDI is permitted up to100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities.”


Although, in line with the government’s Digital India campaign, the introduced cap creates uncertainty on the status of the already existing digital media entities with investment higher than the said percentage. Further, it is unclear whether the policy would be applicable only to uploading/streaming websites or text-based content websites. Furthermore, clear guidelines need to be issued on applicability on online intermediaries/digital news aggregators, applicability on foreign news websites, separation of digital media business from other businesses, divesting or restructuring, etc. as a result of the change. In fact, Department for Promotion of Industry and Internal Trade (DPIIT) has recently sought the I&B Ministry’s views on these and other issues raised on the 26% FDI in the digital media sector.[iii]


It is pertinent to note that the above regulations will come into force from the date of publication of FEMA Notification.


The Ministry of Commerce and Industry has issued a Press Note dated 18th September 2019 to bring changes to the Foreign Direct Investment (FDI) Policy pertaining to Coal Mining, Manufacturing, Single Brand Retail Trading, and Digital Media to attract foreign investment into India, increase productivity and enhance competitiveness.