Drafting

Fee Structure

Divorce/Family - Family Settlement Agreement
Total : 25000/- INR


Some families may want to settle property related disputes out of court. To this effect, they may go in for a family settlement agreement which needs to be signed by all the members acknowledging that this agreement wasnt made through fraudulent means, force and coercion from any family member. Not just property or immovable assets, shares, claims, family feuds, are also areas where a family settlement agreement is useful.

Does the family settlement agreement require registration?

A family settlement agreement can be orally conveyed or in a written format but documentation is recommended because it helps avoid any confusion.

As for registration and stamping, you need to determine whether it is required. For a collateral purpose, the agreement may be stamped and not registered. A settlement doesnt require registration if it is oral. But for the written word to be considered legal, registration is a good option because it is accepted in a court of law.

Do note that if there are amendments to what has already been accepted, another document should be created but it need not be registered because it doesnt fall under the purview of the Registration Act 1908 (Section 17 (2)).

Suppose your family settlement agreement is not registered, it can still act as an estoppel. Estoppel is that which prevents a person from asserting something that is contrary to what he/she had implied previously orally or in written. However, you will need to register an agreement if it causes change in legal rights of the family members. In the Tek Bahadur versus Debi Singh and Others case, the court had considered the validity of a family settlement deed. It upheld the validity of an oral family settlement and ruled that registration is required only when it is written.

A family settlement agreement is useful given that it an amicable resolution among parties and does not take as much time as a court of law. Do note that transfer of property or assets under this agreement is not to be considered as a gift and is neither a transfer of right. Therefore, there is no question of capital gains tax. The Madras High Court ruled to this effect in the case of Commissioner of Income Tax vs AL Ramanathan in 1998.