• PIO Asset protection from creditors

I and my wife live in UK and we are PIO's. My wife works in a high liability profession, where litigations and compensation claims occur frequently.

Im concerned for the future in case I'm not alive, when my wife inherits my assets. What is the best way to protect these assets in India - Pune (Apartment, NRE bank accounts etc) from any potential overseas creditors she may have to face (from any professional practice claims)?
Asked 3 years ago in Property Law
Religion: Christian

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14 Answers

There are many insurance companies that will come forward to insure her against any malpractice claim, negligence, damages, compensation etc. during the  course of her profession. Medical and other professionals do take such insurances abroad.

Ravi Shinde
Advocate, Hyderabad
5129 Answers
42 Consultations

Your assets will not be subject to any claim against professional risks of wife. Your property is your property, for satisfaction of such claim only personal property of professional involved is subject matter of claim any against  misconduct/negligence being her personal liability. There is no vicarious liability in such cases.  

Ravi Shinde
Advocate, Hyderabad
5129 Answers
42 Consultations

Executing a will bequeathing such properties to kids/near relatives will save such properties from claim.

Ravi Shinde
Advocate, Hyderabad
5129 Answers
42 Consultations

 


Section 6 of the MWP Act allows an individual to buy a policy for himself under the Act and create a trust for the same

2)In this policy, the policyholder (the husband) loses all control over the policy with the exception of paying premiums and the policy becomes a property of his wife in the form of a trust where the beneficiary of the trust is only his wife and children.

 

3)creditors would not be able to claim the funds from this policy as the policy from the very first day is the property of a trust and not his personal estate.

 

4)the Act also empowers the wife to buy a policy for herself independently of her husband which would also be considered her separate property as if she is unmarried. Thus, if your wife is an earning member of the family and has an income that is substantial to buy life policies, you should encourage the idea as it’s totally in line with the concept of insurance protection;

 

5) Any married man residing in India (except Jammu and Kashmir) can avail benefit under this Act.

 

 

Ajay Sethi
Advocate, Mumbai
99779 Answers
8145 Consultations

You can create irrevocable trust, as the property belongs to the trust and not the settlor, creditors cannot lay claim on the asset.

Ajay Sethi
Advocate, Mumbai
99779 Answers
8145 Consultations

1. Ordinarily, Judgement and order passed by a  foreign court  based on foreign Act s not enforceable in India.

 

2. So, your Assets in India will ordinarily be well fortified legally in India.

 

3. However, you can create a Trust in India which will look after your Indian Assets for the maintenance and welfare of your wife in case of your demise.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

1. Validity of conditional will  can be challenged.

 

2. If you want to avoid creation of Trust, you can gift/Will your Assets to your mother or any trusted person with living and maintenance right of your wife on/from the said Assets.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

Your wife should not disclose the assets she possess in India especially during such compensation claims.

She should restrict the revelation of the details of her assets to the assets lying on her name in that country alone.

Moreover this question will arise only after she inherits yoyr properties after your lifetime, which will not reflect in the list of her assets. 

She should not voluntarily disclose the details after acquiring the properties through such inheritance. 

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

1. If your mother is not alive, your wife will inherit your Assets after your demise being your sole legal heir.

 

2. You can Will the property in favour of your trusted friend with her living/maintenance right as suggested above.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

It is not automatic that the properties lying on her name in the foreign country would be attached by the court of a different country until and unless the details of her assets are provided by the claimant before the trial court with documentary evidences. 

There is no way to protect her interests other than by adopting silence over the properties lying on her name at overseas. 

Besides it is cumbersome process for the foreign creditor to attach her assets lying in India  towards his claim even after getting a decree in his favor by court of his country. 

The claimant cannot file a suit for recovery directly in India if the cause of action has not taken place in India. 

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

There is no provision in law to attach her property in India towards recovery of the claim amount for the debts at a foreign country 

She should not voluntarily disclose the details after acquiring the properties through such inheritance. 

Besides it is cumbersome process for the foreign creditor to attach her assets lying in India  towards his claim even after getting a decree in his favor by court of his country. 

The claimant cannot file a suit for recovery directly in India if the cause of action has not taken place in India.

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

Dear Client,

The best way would be to write a will or make a gift deed. This will ensure that your property goes to the person you want to. Also, don't forget to get the will/gift deed registered. But still if you have kept the property as collateral or have taken any loans the liabilities will also shift to her. It is better if you clear your debts sooner.

 

Anik Miu
Advocate, Bangalore
11014 Answers
125 Consultations

Conditional will is only way to protect the same after death

Prashant Nayak
Advocate, Mumbai
34515 Answers
249 Consultations

On your demise wife would inherit your properties 

 

you can create a trust and transfer your assets to trust wherein wife would be the beneficiary of trust 

Ajay Sethi
Advocate, Mumbai
99779 Answers
8145 Consultations

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