Dhirubhai Ambani intentionally did not leave a will behind as he thought that it will make his two sons remain united. The result was totally opposite. After Dhirubhai’s death, Mukesh Ambani kept a tight control over the flagship Reliance Industries, while Anil was left with the feeling that he was being ignored, and their bitter dispute continued. Succession and family politics are often at the core of these bitter disputes.
Many successful individuals and business owners often shy away from addressing their property and wealth succession planning. It's true that Succession planning is a reminder of eventual mortality, making the topic emotionally challenging to broach. However, this hesitation to plan for the future can be a risky gamble, leaving their successors burdened with complex tasks and potential conflicts. In India, where a significant number of people do not have a will or succession plan in place, the repercussions can be even more pronounced.
The absence of a proper succession plan could lead to a host of issues for the family left behind. Not having a will may result in intestate succession, where the distribution of wealth follows predefined laws based on religion and gender, which might not align with the individual's wishes. To avoid such complications, it is essential to take proactive steps and create a comprehensive and legally compliant will.
Here are five crucial recommendations to establish a robust succession plan:
1. Make a Will:
Creating a will that is clear, unambiguous, legally compliant, and proper for execution is the first and most critical step in succession planning. It allows individuals to dictate how their wealth and assets will be distributed among their heirs after their passing. In the absence of any will, the wealth passes on to the heirs depending on religion and gender (intestate succession). For passing on differently than what the intestate succession laws say, you need to have a legally binding will. This will ensure that hard-earned assets are transferred according to your wishes.
2. Nominations to Your Investments & Assets:
Ensuring that all investments and assets have designated nominees is a basic yet often overlooked aspect of succession planning. Nominations simplify the process of transferring financial assets, minimizing the need for legal paperwork. While disputes may still arise, nominations generally facilitate a smoother passing of financial assets.
3. Create a Family Trust:
Establishing a private family trust can be a strategic move, especially for individuals with significant wealth and responsibilities. A trust can ensure that the needs of children, such as health, education, and financial security, are well-taken care of in the absence of the parents. By appointing a proper guardian as per the guidelines provided, a family trust provides added protection and support for the beneficiaries.
4. Ensuring Smooth Transfer of Properties:
Physical properties, especially those in multiple locations, can pose challenges during succession. Ensuring their seamless transfer or even considering selling them if beneficiaries are abroad or uninterested can simplify the overall process. The primary goal is to make the transfer of properties as smooth as possible.
5. Signing Gift Deed:
To avoid the complexities of probate, some individuals opt for a pragmatic approach by signing gift deeds. This method facilitates the transfer of assets by having a common written understanding, which can be particularly useful when selling the property is unnecessary.
While the prospect of planning for the future may still seem daunting, it is important to emphasize that the earlier one acts, the better it is for their family and business.
Additionally, it is essential to regularly review and update the succession plan to reflect changing needs and life circumstances. Events such as children's marriages, job changes, the death of a spouse, or the start of a new business venture should prompt a reassessment of the plan to ensure its continued relevance and effectiveness.
Succession planning is a critical aspect of securing your family's future. By addressing this vital task proactively, individuals can provide their loved ones with financial security, peace of mind, and a well-defined roadmap for managing their assets and wealth after they are gone. Embracing succession planning may seem challenging, but it is a small price to pay for the long-term well-being of those you care about the most.
At Corilus Wealth, we understand the intricacies of succession planning. Our partners are dedicated to guiding you through succession planning, ensuring that you leave behind a lasting impact on your family's financial well-being. Take the first step towards securing a brighter future - schedule a consultation with our team today. Together, we will build a roadmap to prosperity for you and your loved ones.
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