How To Plan Your Succession

The process, if not thought through in a careful and logical way, could give you split heirs. Will, trust or gift-each method has its own advantage. Choose the one that suits you the best

- Teena Jain Kaushal

There was a time when it was not considered wrong to let your children know verbally what they would inherit once you were gone. The recent high-profile case of billionaire industrialist Mukesh Ambani appointing his successors, however, has put the spotlight back on succession planning. For the first time, at the annual general meeting of Reliance Industries Ltd (RIL), the Chairman detailed his succession plan, where his older son Akash and daughter Isha took over the reins of RIL's telecom and retail businesses, respectively, while younger son Anant will lead the new energy business.

Clearly, Ambani is wiser, having weathered the bitter break-up of the erstwhile Reliance empire since his father Dhirubhai Ambani had not outlined a clear succession plan. This had resulted in a bitter tussle between Mukesh and his brother Anil, for control of the group, and finally led to a very public break-up of the conglomerate in 2005. Therefore, it is understandable why Mukesh Ambani is already making provisions to implement a succession plan to protect his children from potential conflicts in the future.

Succession planning ensures that the title of an asset is clear throughout the transition and the rightful heir can own the property in the most hassle-free manner possible. "Ensuring that a business always has the right leaders in place in case of any unprecedented and unfortunate change is the goal of succession planning. Furthermore, in the case of family-owned businesses, the continuation of any family business and the preservation of the wealth depend a lot on succession planning," says Aditya Chopra, Managing Partner of Victoriam Legalis Advocates & Solicitors.