Estate & Succession Series
Series 1 | Article 1
This series of short articles is intended to give you a practical and relatable understanding of estate planning and succession in India. It is my objective that by the end of this series, you will have a better understanding of what it means to plan for your estate and why it is important as well as some of the steps you can take should you decide to plan for your estate.
This series of articles will cover: (1) a general introduction to estate planning and succession; (2) the different ways in which a person can plan their estate; (3) succession through Wills and Trusts; and (4) succession under personal law.
An introduction to estate planning & succession.
The term “Estate” in the context of succession refers to the property in which a deceased person had an interest and which property passes on to the administrators to be administered in favour of the beneficiaries of the deceased. A person's estate includes both their personal assets as well as business assets.
Estates are of two kinds: “testate” where the estate is administered on the basis of a Will and “intestate” where a person has not left a Will and the estate is administered according to the laws of succession applicable to the deceased.
For most of our lives, we focus on accumulating wealth, for ourselves, our loved ones, or the next generation. Through this process, we rely on the advice of financial planners, advisors and wealth managers, or go to great lengths to educate ourselves on managing wealth. When it comes to planning the transfer of wealth from one generation to the next, we avoid taking decisions for various reasons, two of which are, the lack of knowledge or guidance and the apprehension of parting with the wealth in our lifetime.
Planning the succession of one's estate is as important as the accumulation or management of wealth during your lifetime. When people die intestate (i.e. without a Will), the decisions on the distribution of the estate fall on the legal heirs, who more often than not is the spouse and the children. The absence of a succession plan often results in prolonged disputes amongst the legal heirs, inaccessibility to the estate pending such disputes and the inability to derive value out of it, and an almost certain erosion of wealth.
Estate planning or succession planning is the process of deciding how you would like your estate to be distributed after your lifetime and executing a plan that allows for a seamless transmission of your estate to your loved ones. Through estate planning you can also secure your assets during your lifetime.
It is also important to remember that estate planning must not be confined to a specific wealth category of individuals or families but is important irrespective of the size of the estate and may be looked at as you would insurance - different needs for different people. Your plan must be well-thought out and executed keeping in mind your wishes, the practical aspects and requirements of the law, and relationships between legal heirs. It is for this reason that you should consider involving a lawyer while planning your estate.
As stated earlier in this article, when a person does not make a Will, they are said to have died intestate and the transmission of their estate to the legal heirs is based on their personal laws.
The following articles in this series will dive a little deeper into the modes of estate planning and succession in India.
About the Author
Rashmi Shah has been with MZD Legal Consultancy since 2019 and has been practicing law since 2014. Rashmi is a part of the Estate Planning, Succession, and Real Estate practices at the firm. Rashmi also has an expertise in trade mark law and disputes. She can be contacted at rashmi@mzdlegal.in
About MZD Legal Consultancy
MZD Legal Consultancy is a boutique law firm in Mumbai, India. The firm was established in 2011 and comprises professionally qualified lawyers with varied levels of experience and expertise in specific practice areas. To know more, click here www.mzdlegal.in
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