USC with ancestral agriculture land

sugartowner · Post by **sugartowner** » Sat Jun 10, 2017 12:34 pm

Hi guys.
I am an USC R2I and parents also living in India. My father inherited some agricultural land from his parents. I have a married sister also and her fair share of property has already been transferred to her. Parents have enough earned(appreciated) property on their name to live off luxuriously if they want and we are not touching that. It is their prerogative after all.
For future purposes and since this is inherited land, we want to transfer properties to my name as part of (loosely) estate planning. And don't want to go thru complications during eventualities. So I have following questions regarding registration.

- Is there a way to transfer the farm land to my name while parents are still alive?
- Or is there a way to fool proof the inheritance transaction so that my sister could not claim a stake later? Like take a no claim letter now itself or similar?

Please help as I want to take this off the table amicably.

Thanks.

Umang · Post by **Umang** » Sat Jun 10, 2017 4:44 pm

Where are the experts? I am very keen to read a response to this.

me2_r2i · Post by **me2_r2i** » Sat Jun 10, 2017 8:04 pm

Common man! This is no forum for such as legal advice. Any experienced Civil attorney in the US can help you with it ...

My opinion (not advice of any sort) is as follows:

1. India doesn't allow non-citizens to hold agriculture property - even with OCI. So, effectively, you can only claim proceeds of your inheritance property - but not the property itself... i.e., it needs to be sold and converted to cash/equivalents even to raise a claim on it.

2. Any US citizen needs to pay inheritance tax of 30%. Trump promised to abolish it, but its still there i think. So, based on Govt. land rates, you need to pay inheritance tax on the estimated inheritance you show to IRS - Nothing to be done in India - No such thing on inheritance

3. Its better to handle the property while everyone is around. Since it is a inheritance property, you need to take no-claim letter even now. Note that no-claim letter is valid as long as she doesn't contest it in court of law. If you get a no-claim today, and she changes her mind later, she can always claim share as long as property is not "dealt" with.

Again, this is my opinion and am not an attorney. So, its not a legal advice.

Umang · Post by **Umang** » Sat Jun 10, 2017 9:28 pm

me2_r2i;657213Common man! This is no forum for such as legal advice. Any experienced Civil attorney in the US can help you with it ...

My opinion (not advice of any sort) is as follows:

1. India doesn't allow non-citizens to hold agriculture property - even with OCI. So, effectively, you can only claim proceeds of your inheritance property - but not the property itself... i.e., it needs to be sold and converted to cash/equivalents even to raise a claim on it.

2. Any US citizen needs to pay inheritance tax of 30%. Trump promised to abolish it, but its still there i think. So, based on Govt. land rates, you need to pay inheritance tax on the estimated inheritance you show to IRS - Nothing to be done in India - No such thing on inheritance

3. Its better to handle the property while everyone is around. Since it is a inheritance property, you need to take no-claim letter even now. Note that no-claim letter is valid as long as she doesn't contest it in court of law. If you get a no-claim today, and she changes her mind later, she can always claim share as long as property is not "dealt" with.

Again, this is my opinion and am not an attorney. So, its not a legal advice.

I think you meant to say "Come on man!" and not call the OP a "Common Man".

My understanding is that an OCI can inherit agricultural land but he may not purchase it. There is a thread on this subject: http://www.r2iclubforums.com/forums/showthread.php/16123-Agricultural-property-of-an-OCI

This newspaper report supports my contention but as well all know, these things in India can get murky: http://timesofindia.indiatimes.com/nri/other-news/NRIs-guide-to-deal-with-inherited-property/articleshow/9983461.cms

sugartowner · Post by **sugartowner** » Sun Jun 11, 2017 8:24 am

me2_r2i;657213Common man! This is no forum for such as legal advice. Any experienced Civil attorney in the US can help you with it ...

My opinion (not advice of any sort) is as follows:

1. India doesn't allow non-citizens to hold agriculture property - even with OCI. So, effectively, you can only claim proceeds of your inheritance property - but not the property itself... i.e., it needs to be sold and converted to cash/equivalents even to raise a claim on it.

I believe OCI/PIO holders can inherit agricultural lands. There is no need to sell off once someone inherits it.

[QUOTE]2. Any US citizen needs to pay inheritance tax of 30%. Trump promised to abolish it, but its still there i think. So, based on Govt. land rates, you need to pay inheritance tax on the estimated inheritance you show to IRS - Nothing to be done in India - No such thing on inheritance

Even though there is Estate tax/death tax in US, it is exempted for the first $5mil as of now. Only after $5 mil one has to pay 35% on inheritance as tax. No worries there.

[QUOTE]3. Its better to handle the property while everyone is around. Since it is a inheritance property, you need to take no-claim letter even now. Note that no-claim letter is valid as long as she doesn't contest it in court of law. If you get a no-claim today, and she changes her mind later, she can always claim share as long as property is not "dealt" with.

Again, this is my opinion and am not an attorney. So, its not a legal advice.

My situation is not quiet uncommon so asking for any advise. Thanks for your input me2_r2i!

dbs · Post by **dbs** » Sun Jun 11, 2017 5:33 pm

sugartowner;657196...... My father inherited some agricultural land from his parents. I have a married sister also and her fair share of property has already been transferred to her. ....For future purposes and since this is inherited land, we want to transfer properties to my name as part of (loosely) estate planning. And don't want to go thru complications during eventualities. So I have following questions regarding registration.

- Is there a way to transfer the farm land to my name while parents are still alive?
- Or is there a way to fool proof the inheritance transaction so that my sister could not claim a stake later? Like take a no claim letter now itself or similar? [/quote]

There are two questions here really.

1. Transfer may not be allowed as agri land is allowed only as inheritance. That does include the sad event.
2. No claim letter may not help. It will help only if it is not required. It depends only on the relationship with your sister. Since this is inherited property, even at the least her existing children on the date of the sad event can become contestants. She herself can contest, no-claim letter or not and if nothing else tie up the estate for years. For that to be binding, she has to be paid her share of the fair market value of estate and recorded as a transaction. bank transactions would form a solid evidence.

Imissindia · Post by **Imissindia** » Mon Jun 12, 2017 11:59 am

sugartowner;657196Hi guys.
I am an USC R2I and parents also living in India. My father inherited some agricultural land from his parents. I have a married sister also and her fair share of property has already been transferred to her. Parents have enough earned(appreciated) property on their name to live off luxuriously if they want and we are not touching that. It is their prerogative after all.
For future purposes and since this is inherited land, we want to transfer properties to my name as part of (loosely) estate planning. And don't want to go thru complications during eventualities. So I have following questions regarding registration.

- Is there a way to transfer the farm land to my name while parents are still alive?
- Or is there a way to fool proof the inheritance transaction so that my sister could not claim a stake later? Like take a no claim letter now itself or similar?

Please help as I want to take this off the table amicably.

Thanks.

Why should your sister not be able to claim her share?
She has equal rights to the property and it is wrong to try and create a scenario intended to deprive her of her legitimate share. Your parents can make a will in which they can allocate the property in question to whom they please. If for some reason your parents do not want to provide a share to your sister ( hopefully not just because she is a woman ) then they can will it all to you or if you are still worried, they can sell the property and pass on the proceeds to you. If your sister has a legitimate claim, please do not try to deprive her of it.

sugartowner · Post by **sugartowner** » Mon Jun 12, 2017 6:23 pm

Imissindia;657298Why should your sister not be able to claim her share?
She has equal rights to the property and it is wrong to try and create a scenario intended to deprive her of her legitimate share. Your parents can make a will in which they can allocate the property in question to whom they please. If for some reason your parents do not want to provide a share to your sister ( hopefully not just because she is a woman ) then they can will it all to you or if you are still worried, they can sell the property and pass on the proceeds to you. If your sister has a legitimate claim, please do not try to deprive her of it.

Understand your concern. However it is already clarified here:
I have a married sister also and her fair share of property has already been transferred to her. Parents have enough earned(appreciated) property on their name to live off luxuriously if they want and we are not touching that. It is their prerogative after all.
So no one is denied their share. And parents can write their property to whomever they want.

I am actually turning the question on it's head. How do I protect my share from future troubles amicably? :-)

Umang · Post by **Umang** » Mon Jun 12, 2017 6:36 pm

sugartowner;657314Understand your concern. However it is already clarified here:
I have a married sister also and her fair share of property has already been transferred to her. Parents have enough earned(appreciated) property on their name to live off luxuriously if they want and we are not touching that. It is their prerogative after all.So no one is denied their share. And parents can write their property to whomever they want.

I am actually turning the question on it's head. How do I protect my share from future troubles amicably? :-)

Very simple. Get your parents to write a will where they will the relevant assets to you. Ensure that the will is registered and there are witnesses et cetera. Of course, this is India and nothing prevents your sister from challenging the will but it's a start.

me2_r2i · Post by **me2_r2i** » Mon Jun 12, 2017 9:27 pm

sugartowner;657314
I am actually turning the question on it's head. How do I protect my share from future troubles amicably? :-)

To my knowledge, the only indisputable solution for future troubles is to let your dad sell your fair share and buy some RE with that money on your name. As long as the property is left out as-is, it is always prone to claim - even by your sister's legal heirs.