Will, Trust, Gift: Making Sense of Succession Tools

In the ever-evolving world of startups and traditional family-run businesses, one quiet but crucial question shapes the future: Who's next in line to lead or manage the wealth?

- Vinayak Varadray Bhat

Succession planning isn't just the domain of large corporate boardrooms. It has everyday relevance—impacting families, their long-term financial security, and intergenerational harmony.

Succession planning is way more than deciding who inherits what—it's about protecting your wealth, avoiding any conflict, and ensuring a smooth transfer of responsibility and ownership to those who matter. Several legal instruments can help with this—wills, gifts, trusts, Hindu Undivided Families (HUFs), and family arrangements. Each one of these tools serves a different need, depending on the situation. Here's a look at how each works, and where each may fall short.

Will: A Will is a legal document that specifies how a person's assets will be distributed after their death. It's easy to execute, allows one to appoint an executor to manage the process, and under Indian tax law, assets passed on via a will are tax-free for inheritors. This makes it a convenient starting point for many.