To what extent and subject to what conditions does the Transfer of Property Act permits transfer for the benefit of unborn persons?

Question: To what extent and subject to what conditions does the Transfer of Property Act permits transfer for the benefit of unborn persons? [BJS 1987]

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Answer

Section 13 of the Transfer of Property Act lays down the provision regarding transfer for the benefit of an unborn person. The provision stated that when an interest is created for the benefit of an unborn child, it is mandatory that at the date of the Transfer, a prior interest is to be created in respect of that transfer, and the Interest is created for the benefit of such person shall not take effect until unless it is extending to the whole of the remaining Interest of the person transferring the property in the property to be transferred.

There are two necessary conditions for transferring property:

• The property cannot be directly transferred to the unborn person, so a prior interest must be created in favour of a living person.
• The absolute Interest must be transferred in favour of the unborn child.

Essential elements of Section 13:

1. No Direct Transfer: the property cannot be transferred directly to an unborn person, but property can be transferred for the benefit of an unborn person. Section 13 of the Property Act provides that the Transfer should be for the benefit of the unborn child with the following conditions:

• Transfer for the unborn must be made in favour of a living person.

• There must be an absolute interest in the property in favour of the unborn child.

2. Prior Interest: The transfer of the benefit of an unborn person must be preceded by a life interest in favour of a living person at the time of Transfer. That living person holds the property during his lifetime and till the unborn child is born. After the termination of the life interest, the property will ultimately pass on to the unborn, who by the time comes into existence.

3. Absolute Interest: It is to be noted that only an absolute Interest can be created in favour of the unborn child and not limited Interest. As per Section 13 of the Act, the interest given to the unborn child wholly remains with the transferor of the property and it is only after the termination of the life interest, that the absolute Interest vests with the unborn child.