As societal and family dynamics undergo significant transformation, the importance of effective estate planning has become more critical than ever to prevent future complications. The traditional Indian joint family structure is steadily giving way to nuclear households, while urbanisation and globalisation have dispersed family members across cities, countries, and even continents. These sweeping changes profoundly impact how families approach wealth transfer and preserve their legacies. Modern Indian families are now grappling with a unique set of challenges:

·      Dual-income households with substantial financial assets.

·      International investments and property holdings.

·      Mixed marriages and cross-cultural family arrangements.

·      A growing emphasis on gender equality in inheritance.

·      Evolving legal frameworks and cross-border laws governing succession.

Ownership Rights: Understanding ownership patterns and nominations is crucial to avoid unintended disputes. Ownership is often misunderstood as a simple solution for wealth transfer. For instance, joint real estate ownership between spouses doesn’t automatically mean the surviving spouse inherits the deceased’s share. Without proper planning, intestate succession laws prevail. Under the Hindu Succession Act, 1956, the deceased husband’s share may pass equally to his mother, spouse, and children, potentially complicating ownership.

Similarly, misconceptions about nominations persist. A nominee is merely a custodian/ trustee appointed to manage assets temporarily, not a rightful heir. To ensure assets reach intended beneficiaries, nominations must align with a comprehensive estate plan.

Property Rights: Joint property ownership often creates unintended consequences. Many add co-owners for convenience, unaware that this confers equal ownership unless otherwise specified. The major financial contributor to the purchase may mistakenly assume greater control, overlooking the legal standing of co-owners. Careful consideration of ownership rights when acquiring property can prevent disputes and preserve family harmony.

Digital Assets: The rise of digital wallets, cryptocurrency, and other new-age investments requires estate planning to extend beyond traditional assets. Identifying inheritors and educating them about these assets is essential for a seamless transfer and continuity in investment decisions.

International Assets: Global families must address cross-border inheritance issues, including varying legal frameworks and tax implications. Proactive planning can mitigate potential disputes and ensure compliance with international laws.

Need for tailored solutions

Gone are the days of basic estate planning suited to simpler family structures. Modern families require tailored solutions that address diverse needs and objectives. A combination of wills, family trusts, tax-efficient strategies, and business succession plans is often necessary. Effective planning must also navigate fairness among heirs, align family values with wealth management, and manage multi-jurisdictional complexities.

Will planning

As a first step, it is very important that a will is put in place. A will is considered very basic but is an extremely crucial and important document that dictates wealth distribution. Absence of a will can lead to intestate succession laws to prevail that will result in one’s wealth being distributed as predefined in law which may not necessarily be as per one’s wishes.

Often individuals tend to procrastinate writing their wills for reasons such as- they are too young, have not garnered enough wealth as yet or believe their situation is too simple for any planning to be undertaken. However, any individual with assets and intended beneficiaries should draft a will without delay. Besides the will offers flexibility for any updates/ changes to be undertaken as per one’s evolving life situation. Hence, one need not wait for the perfect day!

Private Family Trusts

A Trust is a sophisticated structure that offers numerous benefits.  A trust can operate like a family investment pool account where assets are invested and held under an umbrella structure for the benefit of family members being beneficiaries to the Trust.  It offers numerous benefits such as:

·      Legacy Preservation: Legacy preservation where wealth can be safeguard for future generations as against a bequest to an individual through a Will that holds the potential to either be managed prudently or squandered away. 

·      Wealth Management: Supporting family members who may lack investment expertise.

·      Protection for Vulnerable Members: Safeguarding minors and those with special needs.

·      Uninterrupted Access: Avoiding legal or administrative delays in accessing assets after a family member’s demise.

Debates often arise about whether to opt for a will or a trust. While a will is a must-have, setting up a trust depends on factors like flexibility in renouncing ownership, cost, and the complexity of family needs. Each solution should be carefully assessed to align with individual objectives.

Conclusion: Balancing tradition and modernity

Succession planning for modern Indian families involves balancing traditional values with contemporary realities. As family dynamics grow more complex, proactive planning and transparent communication become indispensable. Engaging professional guidance ensures that estate plans are comprehensive and customized to address unique challenges.

Building a legacy demands both foresight and adaptability to address the evolving needs of modern families. By embracing tailored estate planning strategies — whether through wills, trusts, or multi-jurisdictional solutions — families can safeguard their wealth, ensuring it becomes a lasting source of empowerment and unity across generations. Thoughtful and proactive planning serves as the cornerstone of a well-preserved legacy, paving the way for financial security, familial harmony, and enduring peace of mind.

(The author is Head of Wealth Planning, Products & Solutions, Sanctum Wealth)

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