Estate Planning Advisory for Indians and NRIs
Wills, Private Trusts, Power of Attorney & Tax-Efficient Transfer

Estate planning is the proactive arrangement of how an individual's assets will be managed during incapacity and transferred to chosen beneficiaries after demise. The framework spans Will drafting, private trust structuring, Power of Attorney coordination, nomination strategy, and tax-efficient cross-border transfer planning. We deliver complete estate planning advisory at N D Savla & Associates — working alongside specialised succession-law counsel to deliver one integrated estate, tax, and FEMA engagement.

Estate planning is the deliberate, lifetime arrangement of an individual's affairs so that wealth, business interests, and family responsibilities transition smoothly across life events — incapacity, retirement, and demise. It is not a single document but a coordinated framework of legal instruments, financial nominations, and tax decisions. A complete estate plan blends the Will, the private family trust, the Power of Attorney, and the nomination strategy in proportions that match the family's circumstances.

Estate planning becomes substantially more complex for NRI and OCI families. Indian immovable property follows Indian succession law regardless of the deceased's residence, while movable property typically follows the law of the deceased's domicile at death. NRIs therefore need separate Indian Wills for Indian assets and home-country Wills for foreign assets, and foreign estate-tax regimes such as US federal estate tax and UK inheritance tax need coordinated planning. Our estate planning advisory connects with the wider inheritance framework, and coordinates with gifts advisory, clubbing of income, capital gain on sale, and NRI tax filing — so every family receives one structured legacy-protection engagement.

The Will is the foundational instrument of every estate plan. Careful drafting determines whether the testator's actual wishes will be honoured or contested.

Essential Validity Requirements

Section 63 of the Indian Succession Act 1925 prescribes the validity requirements — the testator must be of sound mind, the Will must be made voluntarily without coercion, the testator must sign or affix mark, and the Will must be attested by at least two witnesses. Witness selection matters: beneficiaries should not act as witnesses, because Section 67 voids bequests to attesting witnesses. The Will should clearly identify the testator, list all assets, name beneficiaries, specify allocations, and appoint an executor.

Registration of Will

Registration of a Will at the Sub-Registrar Office under the Registration Act 1908 is not mandatory in India. However, registration establishes prima facie genuineness, deters tampering, provides access to the registered copy after the testator's death, and reduces the burden of proof during probate. Our team always recommends Will registration for substantial estates, and the testator can register supplementary codicils that modify the original Will without rewriting it.

Executor Appointment

The executor is the person named in the Will responsible for administering the estate — collecting assets, settling debts and tax liabilities, applying for probate where required, and distributing the residuary estate. The executor can be an individual, two or more individuals acting jointly, or an institutional executor such as a corporate trustee. The choice depends on the estate's complexity and family dynamics.

Probate Requirement Under Section 213

Probate is the court certification that the Will is genuine. Section 213 makes probate mandatory in cities under the original jurisdiction of the Bombay, Madras, and Calcutta High Courts for Wills made by Christians, Parsis, and certain other communities. For Hindu Wills, probate is not strictly mandatory in most jurisdictions but is often practically required by banks and registrars for high-value transfers. Our team analyses probate applicability at the drafting stage.

Foreign Wills and Ancillary Probate

Wills made outside India that cover Indian immovable property can be recognised through the ancillary probate mechanism under the Indian Succession Act 1925. NRIs holding a US, UK, or other foreign Will can extend coverage to Indian property through ancillary procedures. The more efficient practice, however, is to maintain separate Indian and foreign Wills that operate in parallel — the dual-Will approach typically delivers faster estate administration.

The private family trust is the most powerful estate planning instrument for substantial estates. Every engagement involving significant wealth, complex family structure, or business succession deserves a careful trust evaluation.

The Settlor, Trustee, and Beneficiary Structure

A private trust under the Indian Trusts Act 1882 involves three principal parties. The settlor (author of the trust) creates the trust and transfers assets into it. The trustee holds and manages those assets in accordance with the trust deed. The beneficiary receives the benefits of the trust property. The trust is a fiduciary arrangement separating legal ownership (trustee) from beneficial ownership (beneficiary), and the same person can play multiple roles in certain structures.

Specific Versus Discretionary Trusts

A specific trust fixes each beneficiary's share in the trust deed itself, leaving trustees no discretion over distribution amounts. A discretionary trust empowers trustees to determine each beneficiary's share based on circumstances and the trust's purposes. The discretionary trust offers greater flexibility for evolving family situations, while the specific trust offers predictability — the choice depends on the settlor's goals for control versus flexibility.

Revocable Versus Irrevocable Trusts

A revocable trust allows the settlor to terminate or amend the trust during their lifetime, retaining significant control — but Section 61 of the Income Tax Act 1961 clubs the income from revocably transferred assets back to the settlor. An irrevocable trust permanently transfers ownership away from the settlor, and Section 62 carves out lifetime-irrevocable transfers from Section 61 clubbing. Irrevocable trusts deliver the principal tax efficiency benefit but require the settlor to relinquish control.

Trust Deed Drafting

The trust deed is the constitutional document of every trust. It must state the settlor's intention to create the trust, identify the trust property, name the trustees, designate the beneficiaries, specify distribution rules, and fix the trust's duration. The deed must address contingencies such as trustee resignation, beneficiary death, and trust termination, and should include a protector clause and an advisory board where the family structure is complex. Our team works with specialised trust counsel for every trust drafting engagement.

Tax Treatment of Private Trusts

Specific trusts where each beneficiary's share is determinate are typically taxed in the hands of the beneficiaries through the representative assessee mechanism. Discretionary trusts where shares are not determinate are typically taxed in the trust itself at maximum marginal rate under Section 164 of the Income Tax Act 1961. Where the trust is a sham (Section 60) or revocable (Section 61), clubbing rules apply. The trust structure choice has substantial tax consequences, so careful structuring matters for tax efficiency.

The Power of Attorney (POA) is an essential instrument for NRI and OCI families managing Indian assets from abroad. Every cross-border estate plan includes one or more POA arrangements.

Types of Power of Attorney

A General Power of Attorney grants broad authority across categories — financial transactions, property management, legal proceedings, banking, and tax compliance. A Special Power of Attorney grants narrowly defined authority for specific transactions, such as registering a particular sale deed or operating a particular bank account. Our team recommends Special POA for sensitive high-value transactions and General POA only where comprehensive day-to-day management is required.

Consulate Attestation for Cross-Border POAs

POAs executed by NRIs and OCI card holders abroad must be properly attested to be valid in India. The first step is notarisation by a notary in the foreign country. The next step is attestation at the Indian consulate or apostille under the Hague Convention, depending on whether the foreign country is a Hague signatory. The final step is registration or stamping in India under the Registration Act 1908 and the relevant State Stamp Act. Immovable property transactions may require registration of the POA at the Sub-Registrar Office.

POA Continuation and Revocation

A POA continues until the principal revokes it, the agent dies or becomes incapable, or the principal dies or becomes legally incompetent. POA arrangements therefore need periodic review. The durable POA, designed to survive the principal's incapacity, is recognised in Indian law in limited circumstances — so integrating POA arrangements with the Will and trust provides the necessary continuity.

Nominations are the day-to-day estate planning instrument that most families overlook. Our practice always reviews and aligns nominations across all financial assets at engagement start.

The Nominee Is Not the Legal Owner

The Supreme Court of India and various High Courts have established that a nominee is a trustee for the legal heirs, not the legal owner of the asset. The nominee receives the asset from the financial institution but holds it for distribution to the actual heirs, determined under the Will or under intestate succession rules. This principle has been confirmed across bank deposits, demat holdings, mutual fund units, and life insurance policies — so families should not assume nominating one person eliminates the need for a Will or trust.

Aligning Nominations With the Will

Best practice is to align nominations with the Will to avoid family disputes after the holder's death. The nominee in each financial relationship should match the beneficiary named in the Will for that asset. Where the Will distributes assets among multiple beneficiaries, the nomination still goes to a single person who acts as a release-conduit but is bound to follow the Will's distribution. Our team cross-references nominations with the Will at every annual review.

Asset Categories Requiring Nomination

Nomination filing is essential across savings bank accounts, fixed deposits, recurring deposits, demat accounts, mutual fund folios, life insurance policies, EPF accounts, PPF accounts, National Pension System accounts, and locker arrangements. Every account opening generates a nomination opportunity, and joint accounts also benefit from nominations. Our team builds a comprehensive nomination register at engagement start.

Estate planning produces substantial tax efficiency across the wealth transfer cycle. Careful structuring captures every available statutory advantage for the next generation.

No Estate Tax or Inheritance Tax in India

India does not levy estate tax or inheritance tax on the transfer event itself, so the wealth transfer from the deceased to heirs produces no tax liability in India regardless of the planning route. This contrasts sharply with foreign estate-tax regimes — the US federal estate tax can apply on global estates above the prescribed unified credit, and the UK inheritance tax applies on estates above the prescribed nil-rate band. NRI and OCI families with foreign estate-tax exposure need coordinated cross-border planning.

Section 47(iii), Section 49, and Section 2(42A)

The Income Tax Act 1961 contains three key provisions protecting the post-transfer tax position of heirs. Section 47(iii) excludes inheritance from the definition of transfer for capital gain purposes. Section 49(1) substitutes the deceased's cost of acquisition as the heir's cost on later sale. Section 2(42A) inherits the deceased's holding period — making most inherited property long-term on subsequent sale. The framework delivers Section 112 long-term capital gain rate access and Section 54 reinvestment exemption eligibility for heirs.

Section 56(2)(x) Gift Exclusion

Section 56(2)(x) of the Income Tax Act 1961 excludes several categories of receipts from gift tax — property received by way of inheritance, gift from specified relatives, gift on the occasion of marriage, and gift through a registered Will. Careful structuring of the relative-relationship test and the marriage-gift exception unlocks substantial flexibility for intra-family wealth transfers during the donor's lifetime, so the gift route can be deployed alongside the Will route.

Trust Tax Efficiency

Private family trusts can produce tax efficiency through income splitting across beneficiaries. Where the beneficiaries fall in lower tax brackets than the settlor, the trust route can lower the family's aggregate tax burden. Section 64 clubbing rules limit the income-splitting benefit where the trust is revocable or the beneficiaries are spouse, minor children, or daughter-in-law — so our team always tests the trust structure against the Section 60 to Section 64 clubbing grid before finalising the design.