The key financial laws that every woman should know
Women need to be aware of laws that strengthen and secure their financial independence
Marriage is a communion of two people. And it is a commonly held belief that, after marriage, both partners have equal share in their wealth. So if something untoward were to happen to one partner, the other is entitled to get full ownership of such wealth. This, though, is a major misconception. Even if a couple was to buy a physical or financial asset jointly and the husband (in the case of a Hindu family) dies, his portion of the wealth is distributed among his wife, children and mother (who are considered class-I heirs). While the wife alone cannot inherit it, her father-in-law is not considered a class-I heir.
“The general principle of inheritance for most women (Hindus, Christians, and Parsis) when their spouse dies intestate, or without leaving a will, is limited to only one-third or onefourth of the estate. The quantum of share received by a Muslim widow under similar circumstances is onesixth to one-eighth,” says Aditi Joshi, head of legal affairs at Yellow, a willmaking platform.
“Numerous women assume full ownership of joint investments in the event of their spouse’s demise. In reality, the husband’s share of the jointlyowned asset is distributed among his legal heirs. This division of ownership often leads to fragmentation, causing significant family challenges, particularly during property disposal when one of the legal heirs refuses to consent to the sale,” Joshi adds.
This is just one law that affects women. There are many such lesser known laws that women must know. Ahead of international women’s day on 8 March, Mint lists out a few of them. Read on.
Death and wealth
On the death of a married woman, all her wealth goes to her husband and children alone. Her parents cannot claim it even if their son-in-law is predeceased and the couple had no children. As per rules, her husband’s class-I and class-II legal heirs will claim her assets. A lot of families discovered this the hard way during the covid pandemic.
“A woman I know faced the tragic loss of her only daughter and son-inlaw due to covid. Since the daughter died without leaving a will, her assets were legally transferred to her motherin-law. According to the Hindu Succession Act of 1956, the mother-in-law inherits the assets in the absence of children or a surviving husband of the deceased married female,” says Joshi.
In an age where many parents have just a single child, intestate succession could be challenging. This is true in cases where the single child is a female and has been married off. Her parents will not get a penny unless her husband or mother-in-law voluntarily shares her wealth with them.
“We strongly encourage couples to write their wills to avoid succession disputes. Women must create individual wills even if they have joint assets with their spouse or in-laws so as to safeguard their parents,” says Joshi. MWP Act
A term life insurance policy protects the family financially if something happens to the policyholder. But in case of
a deceased who is a married man having outstanding loans, creditors can lay claim to the insurance coverage of a regular term plan. The additional safeguard for a woman in such cases comes in the form of the Married Women’s Property, or MWP, Act of 1874 which was amended in 1923 to strengthen women’s financial rights.
If a married man buys a term life insurance under MWP Act, the beneficiaries can only be his wife and children. Neither creditors nor his other relatives, including the deceased’s parents, can lay claim to it.
Do note that if a married woman buys a term plan under MWP Act, she can only add her children as beneficiaries and not her husband. The beneficiaries, once added, cannot be changed either. So, if a man gets divorced, his ex-wife will be entitled to receive the term insurance proceeds. Even if he remarries, he cannot replace the beneficiary in policies bought under MWP Act.
More powers
The MWP Act empowers women to own and manage property independently. “By allowing married women to maintain separate property, the Act provides financial security. They can accumulate wealth, invest, and make
decisions without being solely dependent on their spouse,” says Akriti Singh, chief alliances officer at India Mortgage Guarantee Corporation.
This holds importance in case a married man is going through financial difficulties. “The Act shields the wife’s property from any creditors. Her assets remain safe and cannot be seized to settle her husband’s debts,” she says.
The Act grants married women equal rights to inherit property from parents or other relatives. Stridhan
Stridhan includes all movable or immovable property, gifts, ornaments and cash that a woman receives from friends or family before and during her marriage, during childbirth and widowhood. The term family refers to her family members before she was married and later her husband’s family. Only women have ownership rights to this wealth.
“The law regarding stridhan was more complicated earlier. Women also had very limited ownership rights over her stridhan earlier. She also did not have total rights of disposition over that stridhan. However, with the Hindu Succession Act, under section 14, stridhan was considered a married woman’s absolute property and she had the right to deal with it in any manner she desires, which includes writing her own will with respect to those assets,” says Joshi.
She highlights a key law in this regard. “Under section 15 of the Hindu Succession Act, if a female Hindu inherits property from her father or mother, and there’s no surviving son or daughter (including grandchildren from a deceased son or daughter), the property goes to the father’s heirs,” says Joshi. Loan-related laws
There are currently many sops that are offered to women for purchasing homes, but internal policies at some banks make it restrictive for women to obtain loans. For instance, a married woman may be asked to add her husband as a co-borrower when she applies for a loan.
However, women do receive better loan terms . “Many lending institutions provide concessional interest rates in home loans where the primary applicant is a woman. Several states such as Delhi, Punjab, Haryana, Rajasthan, etc., have reduced stamp duty charges for women property owners. In the central government’s flagship housing programme, Pradhan Mantri Awas Yojana, it is mandatory (in EWS/LIG segments) to have a woman as co-owner to avail benefits of the scheme,” says Singh.
The MWP Act grants married women equal rights to inherit property from parents or other relatives