The following article was first published in the Mint newspaper on 28th February, 2024. The same was written by our Private Client team at Cyril Amarchand Mangaldas, who frequently publish their comments and opinions in the Mint. The online version of the article can be found here.
I have three sons, all of whom are married and have children. My eldest son and his family, who have been residing in the US, are now returning to India. The relations between all my family members are cordial. I now want to divide my estate (primarily my investments in listed stocks, mutual funds and some cash) proportionately in such a manner that each son’s family (especially my grandchildren) get one third share, however, I also want to retain control of my estate in my lifetime. How do I do this?
You can consider a two-step approach. As a long-term step, you may consider preparing a will which can be customised to your preferences. The different bequests of your estate can be factored in your will, and will come into effect after your lifetime, allowing you maximum flexibility. Your will’s executors should be immediate family members or trustworthy friends.
Depending on the exact jurisdiction involved, the probate (or a court driven verification process of your will) may be involved.
The other step you can consider is to set up a private trust. This can be set up during your lifetime itself, and the assets moved into it over time (or even immediately after it is set up).
Depending on how you structure it, you can consider becoming a managing trustee of a discretionary irrevocable trust, and have the chosen family members as beneficiaries. You can control the trust in this manner, and distribute benefits to them as you deem fit.
As you have three sons, you can speak with your attorney and explore the pros and cons of one trust for all three sons, or separate trusts for each of them. Separate trusts may also help you customize the trusts for each son’s circumstances, and transfer control to them post your lifetime or sooner.