She cannot be the karta but has the right to her husband's share in an estate after his death
Several landmark judgments have improved the woman's position in a HUF, such as one that ruled the eldest daughter, even if married, can replace her father as karta in an HUF after his death. However, a karta's wife or daughter-in-law cannot replace him. According to HUF laws, when a karta - or manager - of an HUF passes away, his eldest son automatically replaces him. But, cases where a karta only has daughter/s, or his children are minors, had been subjects of dispute but that has since been resolved with daughter being allowed to become a Karta.
Women’s Status in HUF
Wife cannot demand share in property of husband’s HUF during his life time. It is only a Hindu widow who gets the interest of her husband in the coparcenary or joint family property upon the death of her husband. That interest enables her to claim maintenance and residence. Only a widow can demand partition of the interest which her deceased husband would have been entitled.
In 2005, the Hindu Succession Act gave equal rights to daughters in an HUF. Daughters can become karta as they are coparceners. Wives and daughters-in-law cannot become karta as they are not coparceners. The wife will get husband’s share in an estate after his death. The wife can only be the guardian of an HUF after husband’s death until the eldest child becomes a major.
The position of a karta is a powerful one, as this person controls, and is also the custodian of, the finances of an HUF. The karta can borrow money on behalf of the family. He can spend money for the family without being accountable to the members, as all his actions are assumed to be carried out for the benefit of the family. The decisions of the karta are binding on other members. But, the karta cannot divide the estate disproportionately, or use the assets for the benefit of one member, without the consent of others. In an HUF, an individual does not have a claim on any assets unless they are partitioned. The assets belong to everyone and everyone benefits from them. Hindu Succession Act was amended in 2005 and now recognises daughters to be coparceners. This means they have rights in an estate, and can call for partition of the HUF. To be a karta in an HUF, a family member needs to be a coparcener. Subsequently, courts have ruled that because daughters are allowed to be coparceners, the eldest daughter can also succeed her father as karta in an HUF started by him. But, if the father was a karta in his father's HUF, then typically the father's siblings, who are coparceners in the HUF, would have a first claim to be the karta. Also, the Act recognises wives and daughters-in-law only as members of an HUF but not as coparceners. They, therefore, cannot become karta. In case the karta passes away and is survived only by his wife and minor children, the wife can act as a guardian of the HUF until the eldest child turns major. This means, she can run the business, maintain property and file taxes. But, she cannot borrow or sell assets of the HUF. If a person wants to pass assets he created to wife after his death, he can either make a suitable will or form a trust and make wife the sole beneficiary. In an HUF structure, it's not possible to divide estate disproportionately. The individual will first need to dissolve his HUF before bequeathing his estate to wife. Also, if the person has inherited an HUF or any assets; these need to be divided among sons, daughters and him equally, in accordance of the Hindi Succession Act. Inherited assets cannot be passed on as per an individual's wish. The law, however, is not clear as to whether the children of a married daughter can also become members or coparceners in her father's estate, like children of a son can. Experts say that as the daughter is married and her children become coparceners in her in-laws' HUF, they may not have the right to become coparceners in her father's estate.
Widows have the right
Recently, the Bombay High Court (HC) ruled that a widow who remarries does not need to give up her right over her deceased husband's property. This came to the fore when a man (brother of the deceased) relied on Section 2 of the Widow Remarriage Act 1856 and asserted that his sister-in-law who had remarried should not be allowed to inherit her former husband's property. However, the HC ruled that she still is grouped under the Class-I heir of her deceased husband and should inherit.
Taking over as karta Many a time, statutory authorities may require a declaration from the other members of the HUF declaring the eldest coparcener as the Karta of the HUF. A new Karta is automatically appointed on the demise of the old Karta of a HUF. In order to effect the change of name of Karta in the bank account of the HUF, banks generally require the death certificate of the old Karta along with a declaration from the surviving members declaring that the old Karta has expired and the new Karta is the eldest coparcener as on date. Further, for transmission of securities to the account of the new Karta from the account of the deceased Karta, the surviving members are required to make a joint application in the prescribed form along with a set of prescribed documents to the depository participant.
Married daughter’s right to property under Hindu Succession Amendment Act 2005
After marriage, a daughter will cease to be a member of her parental HUF, but will continue to be a coparcener. Thus, she is entitled to ask for partition of the HUF property, as well as to become the Karta of the HUF, in case she happens to be eldest coparcener of her father’s HUF.
Even in case of a married daughter who has died, her children shall be entitled to the shares that she would have received, if she was alive on the date of the partition. In case none of her children are alive on the day of partition, the grandchildren will be entitled to the shares that the daughter would have received on partition.
Interestingly, the daughter cannot gift her share in the HUF property while she is alive but she is fully capable of giving away her share in the HUF property by way of a will. If a will is not prepared, on her death, her share in the joint property shall not devolve on other members of the HUF but will pass on to her legal heirs.
In a landmark judgment, on August 11, 2020, the Supreme Court has held that daughters will have coparcenary rights on their father’s property, even if the latter died before the Hindu Succession (Amendment) Act, 2005, became effective. The SC’s observation came, while clearing the air on conflicting decisions given by courts in India in the past.