The general rule is under the Transfer of Property Act, 1882 is that property can only be transferred from one living person to another living person. Because when the property is transferred then all interest of the property transferred along with it to the transferee. So if the property is transfer to the unborn person, it would lead to the situation where the interest would be in abeyance till the transferee come into existence, this is against the very concept of interest. But Section 13 is the exception to this general rule, which envisaged that property can be transferred for the benefit of the unborn child.

Section 13 of the Transfer of Property Act, 1882 laid down that:

“Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property.

Illustration A transfers property of which he is the owner to B in trust for A and his intended wife successively for their lives, and, after the death of the survivor, for the eldest son of the intended marriage for life, and after his death for A’s second son. The interest so created for the benefit of the eldest son does not take effect, because it does not extend to the whole of A’s remaining interest in the property.”

Unborn Child

An unborn child is a child not in existence, not even in the mother’s womb. A child in a mother’s womb is considered to be a competent transferee. Thus as per the general rule, a property can be transferred to the child in a mother’s womb.

But pertaining to Section 13 of Transfer of Property Act, 1882 the property cannot directly be transferred to an unborn child, but can be transferred for the benefit of an unborn child.

Two essential conditions:

1. Property cannot be directly transferred to the unborn child, so a prior interest must be created in favour of a living person.
2. The absolute interest must be transferred in favour of unborn child.

Prior Interest

According to the general rule, enshrined under Section 5, the property cannot be directly transferred to the unborn person. Therefore a prior interest is created in favour of a living person so that a valid transfer of property to an unborn person can be carried out. The unborn person must come into existence before the prior interest comes to an end. Once the life interest holder dies, the absolute interest of the property would vest in the unborn person, who by that time have come into existence.

The life interest can be transferred to more than one living person but ultimately the absolute interest will vest in the unborn person. For example, X transfer his property to A for life, then to B for life, then to C for life, and after the death of C to C’s son Y. This transfer of property is valid under Section 13 of Transfer of Property Act.

Absolute Interest
The ultimate transaction of property to the unborn child must be of absolute nature, not limited or life interest. If A transfers his property to B for life Interest and then to his unborn daughter X, limiting her rights to further alienate it. This transfer of property would be void because there is not an absolute transfer of property to the unborn daughter X, as the right to further alienate the property was not given to her.

Under Muslim Law, a gift in favour of an unborn child is considered a void gift. Therefore, this section is not applicable on Muslims.