Indore (Madhya Pradesh): CA Deepak Mantri has said that the trend of forming of ‘private trusts has increased in the country in the last few years, especially in business houses, high net worth individuals, etc. High net worth individuals (individuals with more than Rs. 5 cr. net worth), ultra high net worth individuals (individuals with Rs. 25 cr. net worth) are doing succession planning by forming private trusts instead of writing wills.
He said that in private trusts, specific individuals are the beneficiaries and not the general public, therefore, whoever a person wants to distribute his property after his death; it is possible through private trusts. CA Mantri said this while addressing as a keynote speaker in a seminar organised by Tax Practitioners Association and Indore CA branch here on Friday.
The subject of the seminar was ‘Succession Planning through Private Trust’. Mantri said that it is very easy to challenge a will. In case of dispute, the concerned property becomes disputed, the family takes years to resolve such disputes, which lead to wastage of time and money. He said that in case of a will, the control of the property does not remain in the common pool (for example, family control) and the property goes into the hands of individual members.
He said that in case of small or divisible property, a will seems fine, but in the case of big business houses and high net worth individuals, there are problems in succession planning through wills. In such a situation, private trusts are a good means. He said that for business people, succession planning through wills is not a good option. In this case, private trusts not only provide ownership of the business to the heirs but also do not affect the business as there is no change in the business model.
In this way, planning can be done generation after generation and there is no need to make any change in the form of business. Tata Trust is the best example of succession planning in India. He said that the private trust is always protected from any external claims, lawsuits, creditors’ claims etc. related to the heirs, that is, the personal lawsuits, claims, and decrees etc. of the beneficiaries of the private trust do not have any effect on the property of the private trust. TPA secretary CA Abhay Sharma conducted the programme. On this occasion, a large number of members including CA Ajay Samaria, CA Santosh Sharma, CA Mahesh Jaju, CA Dinesh Goyal, CA Yogesh Talwar, CA Tejendra Singh, CA Dilip Rathore were present.
