Married Women's Property Act

Married Women's Property Act.
Q: What is the Married Women's Property Act and how does it help protect a family?
A: The Married Women's Property (MWP) Act was enacted with a view to protect the properties of women against the creditors.
Under MWP Act all the properties that belong to the women gets insulated and protected from all the other court attachments or any income tax department attachments that the husband has run up. Let's take an example a business family; the family could be a trader or a manufacturer or any other business. In due course of business there are some credit limits or there are bank loans, which have been taken by the business. The bank secures these credit limits against the assets of the business and also takes a personal guarantee of the owner of the business which could be the husband or the family.
In case of the untimely death of the husband the bank starts recovering their loans and in the process they liquidate the assets of the business and also they attach the properties that belong to the guarantor, which in this case is the husband.
In order to protect the family; the wife and the children, the life insurance policies that the husband takes; he should make sure that these policies at the time of taking the policies should be taken under the MWP Act because life insurance policies are also entitled to be attached, which means that the claims that paid out on the death of the husband, goes to the bank and not to the surviving members.
The process of taking the policy under MWP is very simple. At the time of making an application one has to fill in MWPaddendum. This form is also provided by life insurance companies. In the form one has to fill in the details of his wife and children, whoever he wishes to make beneficiaries in the policy. In case of death, the policy proceeds do not go to anybody else other than the beneficiary as named by you in the policy. There is no attachment because the policy does not belong to the husband.
We talk about life insurance as means of financial protection. What is the sense if the money does not go to the family and gets attached for some other reasons? Let me make a point here, all kind of life insurance policies whether online term policies or any other form of life insurance policies are entitled to be issued under MWP Act and one should definitely make a point that he issues a policy under MWP Act to protect his family.
Q: Is the woman's stridhan only protected what she inherits from her father's family or is her own salary and investments and earnings are also protected and second, if her husband were to default on his home loan then the wife's salary cannot be attached when the house is foreclosed or a default is declared?
A: The answer to your first question, we are talking about a loan taken on the business, which the husband runs and he has given his personal guarantee towards those loans. So, all the attachments that we refer to are restricted only to the business and the assets of the husband. So, in the first part of your question, the income that the wife is generating, if she has not given her personal guarantee and the stridhan that she inherited from her parents do not get attached in this case.
The second part of your question is, if wife is not a co-borrower in the loan, if she has not given her personal guarantees then her property, her assets, her incomes cannot be attached, just by the virtue of her being the wife of the person who has taken the loan.
Q: Is the converse true, if a wife were to defaults, the husband'sproperty is safe?
A: Not really. The property goes; let's take the example of a housing loan. The house is going to be attached by the bank and they can ask the wife to vacate and vise versa. The idea behind MWP Act is that the entitlement of life insurance proceeds is for the protection of the family and in this case the bank attaches it. So, under MWP Act, they cannot do that.
Q: What are the disadvantages of this policy because it doesn't see too much acceptance or the sales etc are not too good according to what I have read in reports? Are there any disadvantages?
A: The reason why this is not popular because people are not aware that this kind of a facility is available.
Q: Can I get an addendum to an existing life insurance policy?
A: No. The MWP addendum can be attached only at the time of taking the policy. However, to answer the question, if one still wants to protect his family against this then he can do an absolute assignment of the policy even today; after taking the policy even if he is five-ten years down the policy, he can make an absolute assignment of the policy in favour of his wife. So, it does not anymore belong to him, it is not his property so it cannot be attached.


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