Will & Succession Planning

Without a will, estate distribution follows the intestate succession rules: Hindu Succession Act 1956 (for Hindus, Sikhs, Buddhists, Jains) or Indian Succession Act 1925 (Christians, Parsis, others). Intestate distribution may not match the deceased's wishes — e.g., parents inherit before spouse under Class II heirs if no surviving children. A registered will is the clearest evidence of intent and takes precedence over intestate rules.

Section 63 Indian Succession Act 1925: the testator must be ≥18 years and of sound mind; the will must be in writing; signed by the testator or by someone in his presence and direction; attested by two witnesses who have seen the testator sign and who sign in the testator's presence. Witnesses cannot be beneficiaries — their bequest is void, though the will itself remains valid. Registration is not mandatory but strongly advised for evidentiary weight.

A private trust under the Indian Trusts Act 1882 allows assets to be transferred to a trustee during the settlor's lifetime. Unlike a will, a trust operates outside probate — assets pass directly to beneficiaries without court intervention. A revocable trust allows the settlor to change beneficiaries or reclaim assets. Used for: HNIs with multiple properties, NRIs, family businesses, and estates with minor beneficiaries requiring extended management.

For bank deposits and insurance policies, the nominee receives the money on death — but the Supreme Court in Sarbati Devi v Usha Devi (1984) and multiple High Court decisions confirm that a nominee is a trustee for legal heirs, not the absolute owner. The legal heir can claim the asset from the nominee. Only for Demat accounts and mutual funds is the nominee (post-2022 amendments to SEBI regulations) now treated as the beneficial owner — overriding succession claims in the same way.

India currently has no estate duty or inheritance tax — the Estate Duty Act 1953 was repealed in 1985 and has not been reinstated (as of AY 2026-27). However: capital gains tax arises if the inherited asset is sold (cost basis is the original owner's cost under Section 49(1)); Section 56(2)(x) exempts inheritance; and if the inherited asset generates income, that income is taxable in the heir's hands from the date of inheritance.