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How to deal with Succession and Estate Planning

In this episode of Dhan ki Baat, Ruchi Sharma, Senior Vice President, IIFL Investment Adviser and Trustee Services, discusses the importance of succession and estate planning for efficient and smooth transfer of assets.

1258 views  27 Mar 2018

All you need to know about Estate and Succession Planning

If you own a business, or you are a high net worth individual, you would want your business and assets to stay within the family after your demise. Given the complicated process of money management, there is always a possibility that your family might lose the ownership of your assets, creating a financial mess. Hence, for efficient transfer of assets, it is crucial to have an estate and succession plan.

What is Estate and Succession Planning?

Estate and succession planning is the process of

  • organizing your assets to achieve seamless intergenerational wealth transfer and other objectives, during your lifetime and beyond.
  • Planning for harmonious succession and disposition of your assets
  • Protection of your assets/estate with your family’s needs in mind
  • Preparing your estate for unforeseen eventualities

What happens if there is no Estate plan?

If there is no estate plan, the succession or transfer of assets still takes place but follows the legal procedure mentioned in different succession laws. For e.g.:

  • Hindu Succession Act, 1956.
  • Muslim succession law/ Sharia’h Law.
  • Christians Succession law
  • Parsi Succession Act

Common Tools of Estate and Succession Planning

  • Nomination: The estate owner nominates a person who would get ownership of the assets, once the estate owner passes away.
  • Gifting: The estate owner gifts the assets to whomever he/she deems fit.
  • Will: The estate owner draws a legal document mentioning the terms and conditions for the transfer of assets in his/her absence.
  • Trust: An estate owner gives the ownership of assets to a trustee who is held responsible for providing regular benefits to a third party called the beneficiaries.


Will: is final declaration of a person’s intentions with respect to his property which the courts endorse only after his death.
A Will may not be able to take care of unforeseen eventualities which include incapacitation, false claims or disputes. A Probate may be required in certain states for establishing the rights of the beneficiaries under the Will. Will should be executed in presence of two witnesses, doctor’s certificate and may also be registered for extra caution


Creating a legal framework for the family assets, bypassing probate process, safe-guarding interests of family members including maintenance of members with special needs/disabilities, attaching conditions to gifts (be it on attaining a particular age or fulfilment of the Settlor’s wishes) and avoiding family disputes over the property being some of the prime considerations while designing a Family Trust.
A trust is an arrangement under which the settlor entrusts his property to the trustees, who hold it for the benefit of the beneficiaries. The basic constituents of a trust are transmutation of trust property, declaration of the purpose and the beneficiaries Trustee is the individual or Professional company designated to hold and administer Trust property. The Trustee has a fiduciary duty towards the beneficiaries. If the Settlor thinks that the trustee would require some supervision, he/she appoints a Protector to protect the beneficiaries.
The Creation/settlement of a Trust is done through a document call Trust deed which contains terms under which the trust property must be managed and distributed.

Benefits of Making a Trust

During the lifetime of the estate owner:

  • Asset preservation
  • Asset consolidation
  • Securing assets
  • Segregation
  • Protection of business

After the lifetime of the estate owner

  • Hassle free transfer
  • Controlling ends of funds
  • Minimal transfer costs
  • No family disputes
  • Special needs/ family members