Preserving Prosperity: How India’s UHNWIs are securing their future generations
As India’s economy grows, the population of ultra-high-net-worth individuals (UHNWIs) — those with a net worth exceeding $30 million — is projected to surge by 58.4%, from 12,069 in 2022 to 19,119 by 2027. UHNWIs, who often have assets in multiple countries, face intricate financial and family situations. Due to complex asset portfolios and the need for strategic legacy planning, estate planning is becoming particularly crucial for UHNWIs for the following reasons:
i. Wealth Transfer: Estate planning ensures smooth wealth transfer according to individual preferences. Without a plan, this process can become mired in complications stemming from intestate succession laws, cross-border taxation, disputes, delays, and the emergence of unintended beneficiaries. Such issues can cause assets to remain unsettled for extended periods, sometimes spanning several generations.
ii. Asset Preservation: Estate planning helps UHNWI families shield their wealth from unwanted claimants, assuming it is executed with genuine intentions. It also helps preserve assets for less financially savvy or young family members. By effectively structuring their assets, families can ensure the security of their wealth for future generations.
iii. Business Continuity: For UHNWI families that own businesses, estate planning is crucial to ensure operational continuity. Often, a patriarch’s reluctance to cede control can complicate matters after his passing. Sometimes, the next generation may not be interested in joining the family business. A clear succession plan is essential to address these issues, guiding the management or transition of the business and establishing governance structures for sustained continuity.
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