Will and gift are the drafts given as property to loved ones. Both are legal procedures and have certain principles and guidelines to be followed.
A gift deed is mostly irrevocable and is an impulse decision. On the other hand, Will is a revocable and time-consuming process.
A will help the decision-maker to decide in a better way.
- A will is a legal document outlining how a person’s assets and property should be distributed after death. At the same time, a gift is the voluntary transfer of assets or property from one person to another without expecting payment or compensation.
- Wills are subject to probate and legal procedures after the testator’s death, whereas gifts can be given and received during a person’s lifetime.
- Wills can be contested or challenged in court, while gifts are generally irrevocable once given and accepted, barring instances of fraud or undue influence.
Will vs Gift
A will is a declaration of the testator’s intent to grant the beneficiary certain property rights that will become effective upon his or her passing. It may be challenged or canceled by a new will. While a gift is the transfer of wealth while the giver is still alive. A gift cannot be retracted.
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There is no time lapse in availing of a gift deed—a person to help their share in the willing deed executed.
It needs to wait till the call of the legal authority. This process is time taking and encouraged solely by the confidant of the executor.
|Parameter of Comparison||Will||Gift|
|Type||This type of property transfer will take effect after the death of the person executing the will.||This type of transfer of property is immediate.|
|Nature||Will is prepared according to the family structure. This provision enables the person to draft the will to divide the property equally or unequally.||A gift deed is prepared by any person who is mentally stable and has attained the age of 18 years or more. There needs to be a blood relation to draft a gift deed.|
|Registration||Registration of a will is not compulsory, but to avoid disputes in the future, registering the choice is advisable.||Gifts that involve immovable property need to register under the transfer of property act; Stamp duty should be paid based on the property’s value.|
|Significance||The will’s division can be made per the terms of the testator. The property need not be divided evenly. This process can be altered and requires an attested document to avoid ambiguity.||In a gift deed, the asset is transferred directly. A gift comes into action during a lifetime, unlike a will. The person giving the gift is an heir, and the person receiving the gift is the heiress. The drafts of the gift deeds can be revoked only by the heiress. The heir cannot change their mind once the transaction is done. Drafting a gift deed is the better action to avoid disputes.|
|Witnesses – and their role||For a will to be valid, two witnesses must be signed. The date and place should be precise; all the terms must be transparent and liable. Proving the legator is physiologically stable during the making of the will is essential.||For a gift deed to be valid, it must be registered mandatorily to have legal standing in the present or future. There need to be at least two witnesses and approval of donee in the form of a signature.|
|Tenure – can gift deed and will be challenged?||When one wants to, a will is challenged within 12 years from the date of the person’s death. The genuineness of choice can be questioned in court.||A gift deed can be challenged by filing a suit; some rules must be followed. This deed can be challenged only if one can establish the act was not as per the donor’s wish. This argument is valid if the transaction is fraudulent or misinterpreted.|
What is Will?
A will is a paper in a court of law for the declaration of the intention of the person making the will. The primary purpose of this procedure is property distribution.
This legal document will come into effect only after the death of the person responsible for writing the will.
The documentation must be precise, as it can be easily misinterpreted in the future for fraudulence. The property can be left to an unknown/stranger under the will.
If the person dies without making a will, the property is distributed among the kit and kin,
In India, the property is distributed per the law of the particular religion of the person drafting the will. The person responsible for writing the will can transfer property, jewellery, and money to whomever they want to.
There are some legal rules to be followed while making a will. The guidelines are as follows-
- It can be documented or physically written. A will executor should be appointed to administer the proceeding after their death. This enables the smooth process of implementation of will.
- The document should include all the assets of the legator mentioned correctly. The distribution of immovable and movable assets must be indicated to the people on the receiving end.
- If there is any change of thought, one can make a completely fresh will or codicil (this legal loophole helps the testator to make minor changes without changing the whole content of choice)
In most circumstances, ‘ the executor can solve and answer questions related to the deceased will. However, there is often disagreement, and most of the family members don’t get along, leading to problems.
Legal battles always lead to an increase in legal fees.
What is Gift?
A gift draft is an impulsive action. This deed is done out of a person’s own choice.
The documentation specifies the transaction between a person giving and receiving the gift.
Validation is necessary for executing a gift deed. The financial status of the donor is significant in making a gift deed.
The assets of the donor need to be accessed before drafting the gift.
Registration and stamp duty are payable for the operation of the gift. In India, tax differs accordingly for every state.
Main Differences Between Will and Gift
- A will is active only after the death of a person responsible for the will’s duration, whereas the gift is in action while the person who initiated the deal is alive.
- Registration and stamp duty are not required for the will. For a gift deed, a stamp duty of 2 per cent is a charge for movable properties, and a 3-5 per cent stamp duty of market value of stamp duty is chargeable.
- The presence of an executor and witness is essential when drafting a will. Whereas writing a gift witness and registrar is necessary.
- The gift deed is an impulsive action, mostly done without any consideration. Acceptance by the person to whom the gift is gifted is vital. In a will, the beneficiary can contest and claim the terms in a court of law. The decision of what goes into the will depends solely on the testator.
- A gift deed made to relatives is exempted from the income tax act. It will need to be registered. Hence the income tax act is not applicable.
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.