Estate Planning and Business Succession

Succession Planning

Succession Planning is preparing for the future. A business can only continue for generations when there is an effective succession plan in place. A Succession Plan for the businesses focuses on the identification and development of resources to facilitate their advancement with an organization. Succession Planning is crucial for every business whether it is old or new, large, or small, family owned or non- family owned. It helps in maximizing the efficiency and competency of the company. Without having a clear Succession Plan, a company is bound to fail sooner or later.

Will Writing

A Will is a document which highlights the wishes of the person as to how and to whom his hard-earned assets should go to. It does not matter whether you have plenty of assets or not, a well drafted Will makes sure the loved ones reap the benefits of your assets owned by you.

In the absence of a valid Will, distribution of your assets is as per the Succession Laws which can be complicated depending on your religion and family structure and may not be aligned to your wishes. Leaving behind a Will is a responsibility to ensure the rightful and deserving people enjoy your wealth in your absence. There is a general misconception among people that a Will has to be made only during old age or on the death bed, however, the earlier a Will is made, the better it is. While it may be just a paper when it is created, it gains importance after death, a deciding factor, in identifying, to whom the efforts of one's life are to be transferred

Private Trusts

A Private Trust can be constituted for the benefit of family, one or more individuals, who can be family members, relatives, friends, Children, minors, differently abled etc. Considering the challenging business atmosphere, creation of Private Trust for family to secure the family and dear ones has gained importance in the recent past.

A family trust set up to benefit members of a family is the most common purpose for a private trust. The main objective of the Settlor behind creating a family trust is to progressively transfer his assets to the trust, so that even though the settlor does not remain the legal owner of the assets, through the trust, the beneficiaries may get the benefited from these assets.

Unlike a Will, a Private Trust comes into effect during one's lifetime, and can be easily structured to meet specific requirements. It offers to the Settlor the flexibility in determining every aspect of the trust including management, distribution of assets, adding or deleting beneficiaries and setting the conditions for termination of the trust.

Charitable Trusts

A charitable trust is created with an intention for the benefit of a section of people or for the society at large. Engaging in services such as eradication of poverty, advancement of religion, imparting of education, protection of women or children, providing medical relief or preservation of the environment are some examples for which a charitable trust is set up.

Setting up of a Charitable Trust is an excellent way for someone who wants to leave their mark on society, ensuring that the support for their philanthropic causes is continued even after their passing away. Creating such a trust can ensure that a structure is formed to take care of these activities and the funds are spent in proper manner to fulfill those purposes.

Testamentary Trusts

A Testamentary Trust, also known as ‘Will Trust, is created only after the death of the Testator in accordance with the instructions specified in his Last Will and Testament. A Will may provide instructions for creation of more than one Testamentary Trust, and it can pertain to either some or all parts of the estate.

The most crucial characteristic of the Testamentary Trust is that it does not take effect until the death of the testator or trust maker, thereby making it an irrevocable structure.

A testamentary trust is an attractive alternative which can be used for estate planning on account of its ease of creation as well as the flexibility and cost benefits that it offers over any trust that is created during the lifetime of the person.