Agreement for Family Settlement

Property disputes are more common in Indian families. The war over wealth takes place from lowincome houses to ultra-rich families. Unhappy beneficiaries may challenge even an iron-clad will.

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Property disputes are more common in Indian families. The war over wealth takes place from low-income houses to ultra-rich families. Unhappy beneficiaries may challenge even an iron-clad will. The solution for the war between relatives is to take the matter to the court. Family matters in the courts are time consuming and expensive, where there are no guarantees for a satisfactory resolution. For an amicable settlement, the solution is to go for the family settlement deed.

An agreement where family members mutually decide to distribute the property among themselves and mention the same in an agreement is called a family settlement agreement. The parties to the agreement should be related to each other and should have a claim to share the disputed property.

The property can cover immovable and movable property. A family settlement is used to settle the issue of common property that the family owns.

Those who wish to avoid public, protracted and court battles will find that family settlements are a quicker way to solve the disputes.

It is a conciliation process where a third person helps the family to accept the solution to the dispute mutually. The third person can be a lawyer or an elder family member. The point to be noted is that the settlement agreement is neither a gift nor a transfer as per the Income Tax laws.

What are the legal requirements?

Reaching a consensus is not enough as few legal formalities are to be completed to ensure that the agreement is valid. The settlement agreement should be signed by all the family members involved. A missing signature can be a ground for challenging the document in court. Two witnesses can attest the document, although it is not mandatory to do so.


As per the Indian Registration Act, 1908, section 17, a family settlement agreement that assigns the immovable property must be registered compulsorily, or else the deed will be considered as invalid. Stamp duty is applicable on the value of the property involved.

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