Which is better will or gift deed?

Will or Gift Deed? Navigating the Transfer of Assets to Your Next Generation

will or gift deed

Passing on your hard-earned wealth to your children shouldn’t be a cause for anxiety. Whether through a gift deed or a will, this decision deserves careful consideration, taking into account both family dynamics and financial implications. Let’s explore the possibilities, drawing insights from real-life examples.

Understanding Your Options:


  • Immediate transfer and family harmony:
    • Actor Amitabh Bachchan recently gifted his Rs 50 crore bungalow “Prateeksha” to his daughter Shweta Nanda through gift deeds, ensuring a smooth and immediate transfer.
  • Tax benefits and potential for lower tax rates for recipient:
    • No capital gains tax is incurred on the transfer of assets through a gift deed.
  • Costs involved:
    • Stamp duty and registration fees are payable on immovable property gifted through a deed.
  • Loss of control:
    • The donor relinquishes ownership and economic rights upon transfer.


  • Flexibility and clarity:
    • A will provides a legal map for asset distribution, preventing confusion and conflict. It can be amended or revoked as needed.
  • Potential for disputes and time-consuming processes:
    • Disputes among heirs challenging the will’s validity can lead to prolonged litigation. Legal heirs may also face delays and bureaucratic hurdles in claiming their inheritance.

Making the Right Choice:

  • Prioritize family peace: Consider gifting with a family settlement for added security, as seen in the Bachchan family’s example.
  • Secure continued enjoyment: Senior citizens may prefer wills for immovable property and family homes.
  • Tailor to different assets and timelines: For large estates, a combination of gifting and wills can be strategic.
  • Consider tax exemptions:¬†Unrelated recipients may benefit more from inheritance through a will.
  • Explore family trusts: For complex situations involving businesses and multiple inheritors, family trusts offer nuanced solutions.

Seek Professional Guidance on will or gift deed:

Consult a financial advisor and lawyer to develop a personalized plan that reflects your unique circumstances and desires. Consider factors like:

  • Your health and retirement security
  • Your children’s financial responsibility and maturity
  • Open communication with your family to avoid misunderstandings

Remember, transferring your wealth thoughtfully can be a beautiful act of love and legacy building for the next generation.

Gift Deed:

Gift Deed Pros:

  1. Immediate Transfer: A gift deed comes into effect as soon as it is executed, allowing for the immediate transfer of assets during the donor’s lifetime.
  2. Reduced Disputes: The transfer in the presence of the donor can reduce the chances of disputes among legal heirs.
  3. No Capital Gains Tax: The transfer of capital assets through a gift deed is exempt from capital gains tax.

Gift Deed Cons:

  1. Irrevocable: Once the gift deed is executed, the donor loses economic ownership and rights to the assets.
  2. Stamp Duty and Fees: Ad valorem stamp duty and registration fees are payable on the gift deed for immovable property.


Will Pros:

  1. Flexibility: A will allows for flexibility in determining how the estate will be distributed after the testator’s death. It can be altered or canceled if needed.
  2. Legal Evidence: The will serves as legal evidence for the transfer of the estate according to the testator’s wishes.
  3. No Immediate Tax Liability: Inheritance under a will does not have immediate tax implications for the recipient.

Will Cons:

  1. Operative Only After Death: The will becomes operative only upon the death of the testator, potentially leading to delays in asset transfer.
  2. Possibility of Disputes: The validity of a will may be challenged, leading to potential disputes among legal heirs.
  3. Public Accessibility: In case of litigation or registration, the contents of the will, including asset details and beneficiaries, may become accessible to the public.


  1. Family Dynamics: Consider the potential for disputes among legal heirs and choose the option that aligns with family dynamics.
  2. Tax Implications: Assess the tax implications of both options, including capital gains tax and potential income tax on generated income.
  3. Asset Type: Different assets may be transferred using different methods. For example, family homes might be better suited for transfer through a will.
  4. Estate Size: For large estates, a combination of gifting and wills for different assets at different times may be a viable strategy.
  5. Use of Trusts: Explore the use of family trusts, especially for complex asset structures like shares in a family business.
  6. Retirement Security: Consider the impact on retirement security and the well-being of all family members.

Tax Liability:

  • Income Tax: If assets are gifted to adult children, any income generated from those assets will be taxable in the hands of the recipients.
  • Capital Gains Tax: When the children sell the assets, they may be liable for capital gains tax, potentially at a lower rate depending on their tax bracket.

In conclusion, the choice between a gift deed and a will depends on various factors, and a thoughtful consideration of family dynamics, tax implications, and asset types is crucial in making an informed decision. It might also be beneficial to consult with legal and financial advisors for personalized advice.