AN NRI'S LEGACY: CHOOSING BETWEEN A WILL AND A TRUST

Succession planning is often thought of as something to be dealt with “later.” But for Non-Resident Indians (NRIs), postponing it can create serious complications as NRIs typically have assets across multiple countries, each governed by different legal systems and tax rules. This makes planning not just a matter of convenience, but a necessity to ensure that wealth is preserved and passed on according to one's wishes.

- By CA Sreejith Kuniyil Founder, PravasiTax Solutions Pvt Ltd

Consider the case of Rajiv, a 52-year-old, Dubai-based NRI businessman, had spent years developing his business and wealth both within and outside India. To his acquaintances, he was a man who was well planned in life, from expanding businesses to arranging for investments. But when he passed away unexpectedly, his family had found out that he had overlooked one crucial detail: he had left no Will and nor had he made any succession plans, let alone a document trail for his family to ascertain his assets. His wife found it difficult to gain access to his assets. His young children faced uncertainty, and relatives stepped in to contest rights over family property. What should have been a period of mourning became years of paperwork, courtrooms and legal battle for his family.

This is not an uncommon story. The absence of structured succession planning can turn wealth into a source of conflict instead of security. The courts, too, have repeatedly emphasised this reality. In Om Prakash v. Radhacharan (2009) 15 SCC 66, a widow named Narayani Devi had died without a Will, leaving behind her self-acquired property. When her mother claimed succession, it was contested by her late husband's family who had previously thrown Narayani out of her matrimonial home. The Supreme Court held that since the property was self-acquired, it devolved under Section 15(1) of the Hindu Succession Act, 1956, to the heirs of her husband and thus leaving her parents with nothing. The Supreme Court in this case held that “sentiments and emotional appeals cannot override the clear provisions of succession law.” Where the law provides a definite framework of succession, courts are bound to follow it strictly, regardless of family dynamics or sympathies. This case is a stark reminder: without a Will, inheritance will proceed strictly as per statutory succession, which may not align with one's actual wishes or the family's expectations.