General Attorney
_________RAJIV K. LUTHRA
_______________________

Q: I am a widower with three children. A few years ago, I executed a will and got it registered. In the said will, I bequeathed all my wealth to my children. But I forgot to mention how it should be done and that in case any of my children pre-decease me, how their share should devolve to their legal heirs. Kindly clarify if it is necessary for me to execute a fresh will?
— P. V. N Rao, Vijaywada
You need not execute a fresh will. Instead, you could execute a codicil. Acodicil is part of a will, but with a peculiar function annexed, expressing the testator’s afterthought or amended intention. So, you could make a codicil laying down the modalities of how your wealth is to be bequeathed amongst your children and the condition that should any of your children pre-decease you, their share should devolve to their legal heirs. Since a codicil is considered a part of a will, all formalities of the will would have to be fulfilled, i.e. it would have to be dated, signed and attested by witnesses.

In case you feel that such a codicil would create more confusion, then you could make a fresh will, wherein you would have to state expressly, in addition to your wishes, that the previous will has been revoked and that this is your final will.

Q: I am a 70-year-old man with some immovable property and a small bank balance. I wish to make a private trust and make three of my relatives the trustees, who will look after the building after my demise. I want to know the formalities to set up such a trust.
— R. A. Despande, Nagpur
In order to create a trust, the creator of the trust, also known as the author of the trust, should, with reasonable certainty, indicate by words or action the following things: a) an intention on his part to create a trust, b) the purpose of the trust, c) the beneficiary and d) the trust property. The Indian Contract Act lays down under Section 23 that a trust must be created only for a lawful purpose and that means it should not be forbidden by law, it should not defeat the provisions of law or should not be fraudulent or involve or imply personal injury to any person or property and should not be regarded as opposed to public policy or be immoral. A trust in relation to an immovable property is not valid unless declared by a non-testamentary instrument in writing, signed by the author of the trust and the trustee and registered. An acceptance of the confidence by the intended trustee is necessary for annexing the obligation to him. I suggest that you consult a lawyer for working out the exact modalites.

Q: My friend’s father had given his personal (collateral) guarantee to a bank for a loan to be secured for a company owned by someone else. The company was not in a position to repay its dues and so the bank filed a suit for recovery of the loan and my friend’s father was included in it. Two years back, my friend’s father expired and the bank made my friend and his mother a party in the case. Can personal guarantee be transferred to the heirs of the the deceased even if the company who took the loan is ready to repay it partially. Is there any other way out?
— R. M. Sharma, Pune
Yes, irrevocable personal guarantee for considerations can be transferred to the heirs of the deceased. Most loan and guarantee documents as drafted by banks include legal heirs. Thus, the bank, depending on the drafting of the loan documents, may have the right to implead the legal heirs in the suit for recovery of the money due. The legal position in this regard has been that the legal heirs are liable only to the extent of estate inherited by them. But, in case the bank has entered into some kind of a compromise with the company as to the repayment of the loan partially, and such a compromise does not include your friend or his mother, then your friend and his mother will not be held liable to repay the amount.
Section 133 of the Indian Contract Act lays down that any variance in the terms of the contract without the consent of the surety between the principal debtor (company) and the creditor (bank) would discharge the liabilities of the surety from the transaction subsequent to the variance.

R. K. Luthra is the managing partner
of Luthra & Luthra law offices

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