• HUF use of funds and depletion of assets

I have become the karta of a HUF after the death of my father. The HUF was that of my father. My mother and married sister are other members of the family . I have a wife and one son.

1. Is my son a member/copercener of this HUF
2. For what purposes can I spend the money that is in the HUF account.
3. Can I transfer money from the HUF account to my mothers individual account and then can she gift it to my son or remit it oversees for the education of my son..
Asked 6 months ago in Taxation from Chandigarh, Chandigarh
your son is coparcener in this property. you can spend HUF property for fulfillment of basic needs of a coparcener. Karta has special right to do this. karta is not only a manager of HUF property but he is a person responsible for taking care of all coparceners. 

he can sell HUF property for the welfare of coparcener and no need to take permission from any other coparcener. his act must be bonafide, because coparcener can challenge any alienation of interest of HUF.
Shivendra Pratap Singh
Advocate, Lucknow
2635 Answers
38 Consultations
4.9 on 5.0
1) son s coparceners of HUF 

2) yiu can spend money lying in HUF for benefit of HUF 

3) any transfer of funds from HUF account to individual account be challenged by other members 

4) funds cannot be transferred or sold without the consent of all coparceners, and even the karta cannot transfer it to anyone without everyone’s consent 
Ajay Sethi
Advocate, Mumbai
21783 Answers
1135 Consultations
5.0 on 5.0
1. During your lifetime your son is not a member of HUF. The concept of coparcenory does not apply to HUF property.

2. The HUF money can be spent for the benefit of HUF. 

3. Transfer of HUF amount to your mother's account can be done only with the prior consent of all HUF members, failing which any of HUF members will be at liberty to seek injunction from the civil court.
Ashish Davessar
Advocate, Jaipur
17477 Answers
426 Consultations
5.0 on 5.0
A Hindu Undivided Family (HUF) would continue as joint family even after the Hindu Succession Act, but female heirs of deceased coparceners will have a right over their father’s share on the basis of deemed partition. Under the Hindu Succession Act, such part will no longer continue as that of Hindu Undivided Family, when parted with, but the remaining part will continue in the same family, unless complete partition is effected.
The Hindu Undivided Family (HUF) is a special feature of Hindu society. Hindu Undivided Family is defined as consisting of a common ancestor and all his lineal male descendants together with their wives and daughters. Therefore a Hindu Undivided Family consists of males and females. Daughters born in the family are coparcener and women married into the family are equally members of the undivided family. On the other hand at any given point of time a coparcenary is limited to only members in the four degrees of the common male ancestor and daughter.

1. Is my son a member/copercener of this HUF
A Hindu male with his wife and children automatically constitutes the HUF. The HUF is a creature of Hindu Law.  Coparcener means a member who has a right to demand partition.  Every Co-parcener is Member.

2. For what purposes can I spend the money that is in the HUF account.

Article 236 of the Mulla Hindu Law defines "Karta" as follows:
Manager - Property belonging to a joint family is ordinarily managed by the father or other senior member for the time being of the family: The Manager of a joint family is called Karta.
In a HUF, the responsibility of Karta is to manage the HUF property. He is the custodian of the income and assets of the HUF. He is liable to make good to other family members with their shares of all sums which he has misappropriated or which he spent for purposes other than those in which the joint family was interested. His role is crucial. He is entrusted not only with the management of land/assets of the family but also is entrusted to do the general welfare of the family.

3. Can I transfer money from the HUF account to my mothers individual account and then can she gift it to my son or remit it oversees for the education of my son..

When a Karta is bestowed with such a position it is something, which takes place under the operation of law.
"So long as the members of a family remain undivided the senior member is entitled to manage the family properties including even charitable property and is presumed to be the manager until the contrary is shown.
The karta stands in a fiduciary relationship with the other members but he is not a trustee.
# Ordinarily a Karta is accountable to none. Unless charges of fraud, misrepresentation or conversion are leveled against him. He is the master and none can question as to what he received and what he spent. He is not bound for positive failures such as failure to invest, to prepare accounts, to save money.
# Karta may discriminate i.e. he is not bound to treat all members impartially. He is not bound to pay income in a fixed proportion to other members. Even if he enters such an agreement /arrangement, he can repudiate the same with impunity.
However large powers a karta might have, he cannot be a despot. He has blood ties with other members of the family. After all he is a person of limited powers. He has liabilities towards members. Any coparcener can at any time ask for partition. He obtains no reward for his services and he discharges many onerous responsibilities towards the family and its members.
If he improperly excludes any member from maintenance or does not properly maintain them, he can be sued for maintenance as well as for arrears of maintenance.
T Kalaiselvan
Advocate, Vellore
12677 Answers
120 Consultations
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