Succession Planning

In this chapter we will discuss about 

the basics of succession planning, 

need for succession planning, and 

the various ways of doing Succession 

Planning.

Shall we start are you ready? Come on lets go into the chapter.

1.1 What is Succession Planning?

“In this world nothing can be said to be certain, except death and taxes.” - 

Writer

Succession planning in simple terms refers to the passing of assets and investments down from one generation to another.

You can decide how much of your estate whether be it property, cars, shares, bonds, Gold , mutual fund units and other financial investments, etc. 

Its core objective is also to distribute wealth in a pre-determined manner to a certain beneficiary or beneficiaries to whomever the owner wishes.

It is a dynamic exercise that needs to be reviewed at regular intervals to include any changes that might happen in our life or in the applicable laws of the country.

1.2 What is the need for Succession Planning?

a) Dying intestate (i.e. without a legal Will in place), can lead to various complications like bickering and serious disputes among family member potentially destroying peace and happiness.

b) You might have read about family battles in the mediafighting it out in the courts over the estate of the deceased.

In most cases, they turn out to be a painful and traumaticexperience of settling a will for the various litigants involved.

In fact, the situation of families suffering financially due to not getting access to the deceased’s assets is repeated over and over again in thousands of homes every year and the courts takes years to resolve the issue.

c) If you look around yourself, you are sure to find many real life examples which would make you feel that this situation is like “KahaniGharGharKi” prevailing in several homes but still people in India do not plan for succession.

d) The social and family structure in India is increasingly turning nuclear and the number of the affluent rises thanks to the India growth story and aspirations of the next generation vary from the previous one.

e) Today, professionals earn more but at the same time the incidence of divorces has increased, which creates an apprehension of the family wealth going to outsiders. 

There is a need to cater to their overall wealth planning for their dependents.

Need for Succession 

Planning:

• Dying intestate lead to complications for heirs

• Families suffer due to non-access to deceased’s assets 

• Changing Social and family structure

• Common man in nuclear families need to 

ensure pass wealth to correct person.

Myths Of Succession Planning:

• Meant only for wealthy

• Should think only after retirement

• Legal Heirs will handle maturely

• Nominee will get the assets

• No need for legal opinion

Ways of doing Succession Planning

a) Nomination & Joint Holding Account

b) Power of Attorney

c) Transfer of Property & Mutation

d) Life Insurance

e) Wills 

f) Gifts

g) Hindu Undivided Family (H.U.F)

h) Trusts

Finding which way is appropri¬ate is a 

customized task and in¬volves sitting 

down with your lawyer and CA (like 

with a doctor)and sharing everything 

about one’s family and desires and 

objectives that one wants to achieve.

Key Learning Points

1) Core objective of succession planning is to enable distribute wealth in a pre-determined manner to a certain beneficiary or beneficiaries to whomever the owner of the assets wishes.

2) Succession planning is needed because dying 

intestate can lead to severe hardship for the family both financially and emotionally.

3) If succession planning is not done at all or done ambiguously then family members end up fighting each other in court thus delaying the possession of assets to its rightful beneficiary.

4) While creating your financial plan or even succession plan, it is important that you involve your spouse and children and include their opinionsand make them a part of the entire exercise.

5) If your family is aware of your succession plan and how to access your assets, then half of 

the battle is almost won in the case of 

your death. 

6) Common man in India is afflicted 

by several myths when it comes to 

succession planning.

7) You can do succession planning in 

various ways,viz, nomination, buying 

life insurance , by gifting , by drafting a 

will or by creating a trust among other 

ways.

8) India being a diverse country, 

different laws govern succession 

planning in situations like dying without 

leaving a will or dying with a valid will.