What happens in case of inadequate inheritance planning?

• If both parents were to go together, it’s important to consider who would step into the parent's position to take care of the children’s education and welfare. This is especially crucial for NRIs who might have significant assets across countries. Inheritance planning can help ensure that your loved ones are taken care of, including making provisions for the welfare of your children.

   

• A nominee is not the owner of the funds in most financial assets; rather, he or she is merely a caretaker of the funds. In cases where proper estate planning is not in place, your loved ones might have to wait for years, running around to find out and claim your assets. This is where setting up a trust with non-resident beneficiaries can be beneficial for NRIs looking to protect and preserve their wealth in India and abroad.

   

• Your assets will be distributed in accordance with the “Succession Acts” applicable to you as per jurisdiction, but this may not always align with your wishes. NRIs often have significant assets in India, including real estate, financial investments, and family businesses. Inheritance planning allows them to protect and preserve their wealth, ensuring that the estate is distributed according to their wishes. Without a clear estate plan, family disputes and legal battles may arise, delaying the process and creating unnecessary conflict.

  NRIs face complex tax implications in both their home country and India. Inheritance tax in India for NRI can significantly affect the distribution of your assets, but careful estate planning can help minimize these tax liabilities. Planning in advance can protect your wealth from unnecessary tax burdens and ensure a smoother transfer of assets.

   

• The inheritance laws vary not only between countries but also within different regions or states within a country. This adds layers of complexity to estate planning for NRIs who have assets in multiple jurisdictions. For example, NRIs often ask, Can OCI be a trustee in India? Yes, OCI holders can serve as trustees under Indian trust law, allowing them to manage and oversee the trust’s assets.

   

• In some cases, forced heirship laws in countries where your assets are situated can require your assets to be distributed to certain beneficiaries, even if they conflict with your wishes. Setting up a trust registration in India or abroad, which includes provisions for trust with non-resident beneficiaries, can offer flexibility and control over how your assets are distributed, regardless of where you live or where your assets are located.

  Finally, if you're not available to oversee the process, you can register a trust using power of attorney. This allows someone you trust to act on your behalf, ensuring that your estate is managed according to your wishes, without the delays or complications that can arise from not having a clear plan in place.

Also Read: What Women need to know to deal with divorce proceedings financially?