• Transfer of Property through WIll to only child who has defaulted on Bank Loan

My mother owns a few properties with clear title under her sole name. I am the only child and I have lost my father 25 years ago. I am married and we don’t have children nor intend to have any children. 

I am involved in business and own a private limited company which has a bank loan. Myself and my wife have given our personal guarantee for the loan. Due to a huge loss, our business loan has become an NPA with the Bank. I shall not be in a position to repay the bank loan. It is certain that in a few months’ time the bank shall enforce my personal guarantee. But neither myself nor my wife have enough assets to cover the full bank loan. 

Simultaneously my mother is suffering from cardiac issues and is very sick. In case of death of my mother, due to her old age, the said residential property shall get transferred to my name. In such a scenario, the bank shall confiscate this property to recover their dues and we shall be without a home.

Is there any way we can avoid the above. Can my mother draw up a will and ask for transfer the property, after her death, to another company/ firm / trust which, even though owned by us, cannot be attached against our personal guarantees. Let me know the best solution to above. 

Asked 4 years ago in Property Law
Religion: Hindu

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9 Answers

1)your mother should during her lifetime sell the properties standing in her name . as such on her demise there would no question of attachment of property

2)if property is not sold on her demise you would inherit the property as only legal heir

3) mother can bequeath property to private family trust wherein you would be the beneficiary

4) you need not be trustee in said private family trust

Ajay Sethi
Advocate, Mumbai
87899 Answers
6207 Consultations

5.0 on 5.0

Your question: Can my mother draw up a will and ask for transfer the property, after her death, to another company/ firm / trust which, even though owned by us, cannot be attached against our personal guarantees?

Answer: You can do the following:

1. Ask her to make the Sale Agreement or Gift Deed. Better not to make Will, because a Will needs court proceedings to bring into effect;

2. Once she makes a sale deed or gift Deed to others who are her family members, then that family member (he/she) can later transfer it to you when bank stops pursuing you;

3. So your mother can transfer the property in name of her brother or sister i.e. your maternal uncle or maternal aunt;

4. But to warn you, this needs to be done at the earliest before the bank find out what you intend to do.

5. This kind of practice can be considered fraud and therefore you have to do it secrecy.

Gowaal Padavi
Advocate, Mumbai
1920 Answers
5 Consultations

5.0 on 5.0

You have partly answered your question in bottom of your query. You need to go for insolvency and transfer the property in the trust and you become the beneficiary of the trust but have no right in title.

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

See, firstly, the will can be executed in your favour for sure.

Secondly, but, there is hitch in it as whenever Bank would attach your personal guarantee then they would surely inquire about each and every of your assets. So, eventually these new property would also be come out very easily on inquiry form the registrar’s office.

Sanjay Baniwal
Advocate, South Delhi
5464 Answers
13 Consultations

5.0 on 5.0

1. If the property is transferred to a proprietorship firm then it will be treated as your property and hall be attached by the Bank after filing an Original Application (O.A.) before the local Debt Recovery Tribunal.

2. You can only escape from the clutched of law/Bank if your mother transfer's her said property to a Trust having you as one of the members of the Trust having an objective to look after your family deity of which you shall be the Sebait/Pujari. The Trust Deed shall have to be drafted very craftily to escape/pass future legal scrutiny.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

She can WILL it to trust/ company/ firm or even third person, but intention of 3rd party can`t be judge.

Better adopt some child or process for it.

Ask your mother to WILL the property to child. Non can touch that property. Till 18 your guardian and care taker of property.

Or in unborn through trust

transfer property to an unborn child, a prior "interest" has to be created. This means a trustee has to be appointed for the benefit of the yet-to-be-born child

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. The pvt ltd company must have offered some collateral security against the loan. The bank will touch that first for realising it's dues. If there is any shortfall then bank can enforce your personal guarantees and follow your property.

2. Have you tried for a one time settlement with the bank? You may request your mother to sell one of her properties and the sale proceeds could be used to fund the OTS.

3. Even if you constitute a separate firm, company or trust, it will be essentially under your control only. So such entities won't be immune from the bank action. The bank can follow these too.

4. Please tell who is your most trusted person. Is there any such person. Some strategy can be worked out only if there is any such trusted person. Come up with a follow up with this information.

Yusuf Rampurawala
Advocate, Mumbai
6878 Answers
79 Consultations

5.0 on 5.0

She can very well transfer the property lying on her name to anyone of her choice even by testamentary disposition i.e., by a Will.

But make sure that the property bequeathed shall be on the name f an individual or to a trust and not to a company which is is in no way connected to her.

T Kalaiselvan
Advocate, Vellore
78057 Answers
1543 Consultations

5.0 on 5.0


You will have to do the same but the same has to be done very wisely.

Lifting of the veil theory shall not go against you, wherein the court is able to see the motive behind such will.

If there is some trusted relative on whose name the will can be made then the same will be better.


Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

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