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Who is a member and who is a coparcener?
| Person | Position |
|---|---|
| Son or daughter by birth | Coparcener; can seek partition |
| Wife | Member, not a coparcener; generally has a share when a partition is made between the sons, with rights to maintenance |
| Married daughter | Remains a coparcener in her father's family |
| Adopted child | Treated as a child of the family, after a valid adoption |
Since the 2005 amendment to section 6 of the Hindu Succession Act, a daughter is a coparcener by birth. In Vineeta Sharma v Rakesh Sharma (2020), the Supreme Court held that this right does not depend on her father being alive on 9 September 2005.
Who can be the karta?
The karta manages the HUF, usually the senior-most coparcener. Courts have accepted that a woman coparcener can be karta in the right case; the Delhi High Court said so in Sujata Sharma v Manu Gupta (2015). The karta can act for the family for legal necessity or its benefit, and is answerable to the coparceners on a partition.
How is an HUF created and what does it hold?
Strictly, an HUF comes from the family and is not created by a document. What people call "forming an HUF" is usually writing a declaration, getting a PAN and opening a bank account. Property can come from ancestral sources, gifts to the HUF or the blending of a member's own property, subject to the tax rule on clubbing. Your CA should review how it is funded.
HUF or family trust?
| Point | HUF | Family trust |
|---|---|---|
| Who can use it | Hindu, Buddhist, Jain, Sikh families | Any competent person, subject to law |
| How it starts | Family status | Written deed and transfer of assets |
| Who benefits | Members under law; shares change with births and deaths | Beneficiaries chosen in the deed |
| Control | Karta, within limits | Trustees, under the deed |
| Break-up risk | Any coparcener can seek partition | Depends on the deed |
| Tax | Separate taxpayer at slab rates | Depends on whether specific or discretionary |
An HUF is simple and cheap, but any coparcener can break it up, and a new child dilutes everyone's share. A trust costs more, but it lets you decide the benefit in advance. For the bigger picture, see estate and succession planning or our family office services. If a family is dividing HUF property, see partition suits.
This page is general information, not legal advice. Tax points must be confirmed with your chartered accountant, and rules change, so we check the current text before acting on your matter.
Founder and Managing Partner, VIVS Legal. BLS, LL.B, LL.M, PGDBM, JAIIB.
