Why Indian families are turning to trusts instead of wills
Indian high-net-worth families are increasingly turning to trusts instead of wills to transfer their properties, seeking greater control, privacy, and tax efficiency.
Changing heritage landscape Traditional Indian families relied on wills to pass on the wealth to the next generation. A will is simple, cheap, and legally enforceable. It comes into force only upon death and is likely to lead to probate, which is time-consuming and controversy-ridden. As prosperity has grown and family relationships have become complex, wills by themselves are no longer satisfactory for succession planning.
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Why trusts are becoming popular Trusts provide lifetime wealth transfer, with comfort and control. Families may decide the administration and distribution of assets through time, providing protection for youthful or vulnerable members. Trusts also exclude wills in that they do not pass through probate, thus faster and lower-profile transferring of assets. This is highly attractive to business families, particularly business continuity and freedom from litigation as priorities.
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Tax and legal benefits Trusts also have certain tax planning benefits. While income of trusts is taxed in the hands of beneficiaries, structuring can maximize taxation. Wills, in contrast, have no tax advantage, merely transferring assets. Trusts also insulate against the attacks that all too often face wills in probate courts, reducing the likelihood of future conflicts. To high-net-worth families, this surety is worth the additional setup cost.
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Control and asset protection Another important benefit of trusts is control. The trust creator can define conditions under which assets can be used, such as education, business investment, or medical care. Trusts are thus especially useful for conserving minors or dependents with particular needs. Assets in a trust are also more secure from creditors or family disputes than those inherited under a will, and are thus an even stronger tool for preserving wealth.
Greater awareness among the wealthy India's new generation of entrepreneurs and professionals is more cognizant than ever before of global estate planning trends. With family wealth spread across real property, business, and overseas assets, trusts are the vehicle of choice. Lawyers and wealth managers report growing demand from high-net-worth families who see trusts as a way to achieve seamless succession, maintain legacies, and reduce conflict among heirs in a rising environment of family discord.
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Striking a balance While trusts add complexity, wills are still necessary for less complex cases or smaller estates. Most families choose a combination: a trust to handle difficult assets and ongoing control, and a will for leftover property. The trick is thoughtful planning considering family dynamics, asset complexity, and long-term goals. With increasing wealth in India, the combination of wills and trusts is becoming the cornerstone of modern succession planning.
