Indian families with assets in various countries like the USA and the UK need to think through several factors while creating their succession plan. A single misstep can lead to conflicts among family members, resulting in prolonged disputes over properties and assets.
However, sometimes even a Will registered in India might not fully prevent disagreements among children and other relatives, especially if families’ assets are distributed across different countries.
Kanchi Gandhi, Managing Director, Kotak Mahindra Trusteeship Services, says that effective wealth transfer during one’s lifetime requires a careful balance between foresight and restraint. The goal is to achieve certainty. Families benefit most when the ownership, control, and economic benefit are thoughtfully separated and transferred in stages, aligned to both family readiness and maturity of the assets.
Use phased transfer of wealth method instead of giving it all via one Will
According to Gandhi, a common pitfall is transferring core assets too early, especially operating businesses or controlling shareholdings. While the intention may be to involve the next generation, premature transfer often weakens governance and can cause other issues within the family.
This can lead to fragmentation of decision-making authority and family business’ founders may find themselves informally negotiating rather than decisively guiding.
Gandhi suggests a phased transfer of wealth as a viable solution. Economic interests such as dividends can be shared early while voting rights and managerial control can be transferred later through trust structures with clearly articulated roles.
According to Gandhi, a strategic way of planning transfers can be through well structured trusts, which ensure that control is maintained where necessary, while access to dividend and benefits can be allocated to other family members.
Gandhi says that trusts can also help in multi-generational planning and ensuring that asset protection is taken care of by the family. These structures have become one of the most widely used succession tools for families to achieve a number of objectives through one solution.
Gandhi, however, cautions that postponing transfers indefinitely can lead to its own set of problems. When planning is delayed, families end up depending only on testamentary documents like a Will, which can lead to disputes and procedural holdups right when clarity is most needed.
According to Gandhi, execution risk increases if successors are unfamiliar with asset structures or if assets span jurisdictions. Lifetime structuring with a well-maintained Will can help reduce this uncertainty. It allows founders to test governance mechanisms, familiarize heirs with their duties, and make timely changes.
Does an Indian Will cover UK and US assets?
An Indian Will can express intent for overseas assets, but intent alone does not make a plan airtight.
Different countries have their own succession laws, probate processes, and tax regimes which can be lengthy and onerous. Gandhi says: “As a result, relying only on an Indian Will can lead to procedural delays and uncertainty for heirs.”
To strengthen the plan, families often complement an Indian will with jurisdiction-specific documents or structures, especially where assets are sizable.
According to Gandhi, trusts are frequently used to hold foreign assets, as they allow continuity of ownership and bypass certain probate processes. Foreign exchange regulations also need to be navigated for any offshore structures. The key is alignment. Each document must work in harmony with the others, without revoking or contradicting them.
When asked about whether a separate Will for each jurisdiction works better or a single Will, Gandhi said that in most cross-border situations, separate Wills tailored to each jurisdiction work more effectively.
Gandhi says: “Local Wills address procedural nuances and reduce the need for foreign courts to interpret a global document.”
However, coordination is critical as separate Wills must include clear clauses confirming that they govern only specified assets and jurisdictions.
Gandhi says: “When done properly, this approach improves execution without adding complexity.”
According to Gandhi, a single global Will may suit simpler asset profiles, but as jurisdictions and asset values increase, localised documentation will bring greater certainty and clarity and help reduce delays in transmission.
What specific cross-border complexities do Indian HNIs face in the UK and USA?
According to Gandhi, the UK and the USA each have unique facts to consider.
The USA taxes US persons on their worldwide wealth and taxes non-US persons on their US situs wealth. US situs assets are subject to estate tax at rates that can seriously impact family wealth.
According to Gandhi, it is important for families with cross jurisdictional exposure to plan for their overseas assets to ensure that reporting, disclosures and taxes are taken care of appropriately.
Gandhi says: “Trusts are very useful for US-based families and can help both estate tax protection as well as asset protection.”
For the UK, Gandhi notes that the country adds layers of complexities through its inheritance tax regime and the recent change in their tax laws have significantly changed tax implications for people who have moved to the UK.
Gandhi says: “Long-term residence can change tax exposure even if citizenship remains Indian. UK probate procedures can be lengthy. Local documentation standards apply regardless of foreign succession documents.”
What are the common mistakes in cross-border succession planning, and how to address them?
According to Gandhi, one frequent mistake is assuming that domestic planning automatically extends overseas. Another is overlooking tax exposure until succession is triggered, rather than addressing it upfront.
Any planning or structuring that can be done to address offshore estate or inheritance tax issues must be taken care of efficiently and in advance. There are very efficient ways to plan and with the correct advice, a family is able to significantly reduce the offshore inheritance or estate tax burden.
Gandhi, speaking from her practical experience, says some families also underestimate the importance of reviewing plans after changes in residency, citizenship, or asset composition.
Early integration and periodic review are therefore critical. Succession planning should be treated as an ongoing process, revisited after major milestones such as relocation, monetisation events, or changes in family circumstances.
