With increased accessibility investments and improvement in financial literacy, many individuals are paying attention to after-life management of their wealth, aka estate planning. Estate planning is the process of arranging for the management and disposal of your estate during your lifetime and after death. It ensures that your hard-earned assets go exactly where you want them to go, protects your loved ones, and creates a lasting legacy.
However, compared to foreign countries, estate planning in India is still in its initial stage, with very few taking concrete steps.
With proper estate planning, you can ensure peace of mind not just for yourself but for generations to come. To help you, in this article, we will cover what is estate planning and how to make a Will for the first time. Let’s start.
What is Estate Planning?
Many think that estate planning is equal to making a will. However, estate planning is much more than just writing a will. It’s a comprehensive approach to managing and preserving your assets while you’re alive, and distributing them according to your wishes after you’re gone.
Here’s how an estate plan looks:
Asset Management: Organizing your assets for maximum growth and protection during your lifetime
Distribution Planning: Determining who gets what after you’re gone
Tax Optimization: Structuring your estate to minimize tax burdens
Incapacity Planning: Ensuring your affairs are managed properly if you become unable to do so
Legacy Planning: Defining how you want to be remembered and what values you want to pass on
Business Succession: If you own a business, determining how it will continue
Legal Framework for Estate Planning in India
The Indian Succession Act 1925, despite being nearly a century old, continues to be the backbone of inheritance laws in India. However, it doesn’t work in isolation.
Personal laws based on religion significantly impact how your assets will be distributed. If you’re Hindu, the Hindu Succession Act will govern your inheritance. Muslims follow Sharia law principles for succession. Christians and Parsis have their own set of rules under the Indian Succession Act.
Here’s how these laws apply differently based on your religious background (when there is a lack of Will):
| Religion | Applicable Law | Details | Key Features |
| Hindu, Buddhist, Jain & Sikh | Hindu Succession Act, 1956 (amended 2005) | Property divided equally among: Class I heirs (mother, spouse, children, children of predeceased children) | • Daughters have equal coparcenary rights • Property divided equally among all Class I heirs |
| Muslim | Sharia Law (uncodified) | Sunni: Shares distributed as per Quranic injunction. Shia: Relatives by blood given preference | • Heirs categorized as Sharers and Residuaries • Sunni and Shia sects have different distribution methods |
| Christian | Indian Succession Act, 1925 | If spouse and lineal descendants survive: 1/3rd to spouse, 2/3rd to children If only spouse survives: Half to spouse, half to kindred | • Equal distribution among children regardless of gender • If no lineal descendants, property goes to spouse and kindred. • If no spouse or kindred, the entire estate to children |
| Parsi | Indian Succession Act, 1925 (Parsi section) | Equal shares to the widow and children Children of predeceased children get their parents’ share | • Equal distribution between sons and daughters • The widow and each child get equal shares. • Children of predeceased children inherit their parents’ share |
| Jews | Indian Succession Act, 1925 | First to sons, then daughters if no children, then to the parents or nearest kin | • Patrilineal focus, Proximity of blood relationship matters |
| Inter-religious marriages | Special Marriage Act, 1954 | The Indian Succession Act applies regardless of religion |
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Important Components of Estate Planning
Now, let’s talk about important parts of estate planning and what forms it.
Wills
A will is the most important part of any estate plan. It’s a legal document that clearly states who gets what after you’re gone. Without a will, your assets will be distributed according to succession laws, which might not align with your wishes.
Not just any will would do. To be legally valid in India, your will needs to be:
In writing
Signed by you
Attested by at least two witnesses
Made voluntarily, and when you’re of sound mind.
While registration of wills isn’t mandatory in India, it’s highly recommended. A registered will has stronger legal standing and is less likely to be contested.
Trusts
Trusts are becoming increasingly popular among high-net-worth individuals in India. A trust is essentially a legal arrangement where you (the settlor) transfer assets to trustees who manage them for the benefit of specific beneficiaries.
Trusts offer flexibility that wills can’t. They can be set up to take effect during your lifetime (living trusts) or after your death (testamentary trusts). They can help provide for minors, individuals with special needs, or even manage charitable giving.
The Private Trust Act has made setting up trusts more accessible, even for those with moderate wealth. However, trusts are complex legal structures that require professional guidance to set up properly.
Power of Attorney
A Power of Attorney (PoA) allows someone to make decisions on your behalf if you’re unable to do so. In 2025, with increased global mobility and digital assets, having a PoA has become essential for everyone.
There are different types of PoAs:
General Power of Attorney: Gives broad powers over property and financial matters
Special Power of Attorney: Limited to specific acts or property
Durable Power of Attorney: Remains valid even if you become incapacitated
Medical Power of Attorney: Specifically for healthcare decisions
Those who prepare their estate plans before they’re needed save their families immense trouble. It’s all about timing and preparation, being ready before circumstances force your hand.
Nominations & Joint Holdings
Nominations for bank accounts, insurance policies, mutual funds, and other financial assets ensure a smooth transfer to your chosen beneficiary after your death. What many individuals don’t understand is that a nomination is not a substitute for a will. A nominee is merely a trustee and not the ultimate beneficiary unless specified in your will.
Joint holdings, when structured properly, can facilitate the automatic transfer of assets to the surviving holder. This can be particularly useful for bank accounts, fixed deposits, and property.
How to Do Estate Planning in 2025?
Here is your step-by-step guide on how to do estate planning in India in 2025.
Step 1: Take a Complete Inventory
Begin by listing all assets you own:
Immovable property (houses, land, commercial property)
Investments (stocks, mutual funds, bonds)
Bank accounts and fixed deposits
Insurance policies
Business interests
Personal valuables (jewellery, art, collectables)
Digital assets (cryptocurrency, NFTs, online accounts with monetary value)
Don’t forget to include liabilities as well. Outstanding loans, mortgages, and other debts are part of your estate, too.
Step 2: Identify Beneficiaries
Make a list of primary and contingent beneficiaries. Consider their financial literacy, needs, and circumstances. For minor children, you might want to set up trusts rather than direct inheritance.
Consider these factors when deciding on distributions:
Financial needs of dependents
Age and financial responsibility of heirs
Special needs or circumstances
Your relationship with each beneficiary
Family dynamics that might complicate direct inheritance
Step 3: Choose the Right Professionals
Estate planning isn’t a DIY project. You’ll need:
A lawyer specialising in estate planning.
A financial planner to optimise tax implications.
For substantial estates, a chartered accountant.
For digital assets, a digital estate planning specialist.
The cost of professional help is minimal compared to the potential disputes and tax inefficiencies that could arise without proper planning.
Step 4: Draft and Register Essential Documents
With professional guidance, prepare these essential documents:
Will
Trust deeds (if applicable)
Power of Attorney
Advance Medical Directive (living will)
Letter of Instructions (for personal wishes not covered in legal documents)
Estate Planning for Digital Assets
In 2025, digital assets form a significant part of many estates. As a result, your digital wealth needs careful planning, too.
Digital assets include:
Cryptocurrency holdings and wallet information
NFTs and digital collectibles
Domain names you own
Online business assets
Monetized social media accounts
Cloud storage with valuable content
Digital purchases (music, books, movies)
Password managers and digital vaults have become crucial tools for modern estate planning. Services like DigiLocker in India now offer specific digital inheritance features that comply with Indian regulations.
Here are some strategies to ensure your digital wealth is properly transferred:
Create a digital asset inventory with access instructions
Use a password manager with emergency access features
Set up legacy contacts for major accounts where possible
Include specific instructions for digital assets in your will
Consider a digital estate planning service that understands Indian laws
Conclusion
Estate planning isn’t just for the wealthy anymore. It is for everyone with any assets. In 2025 India, with complex family structures, digital assets, and evolving laws, having a clear estate plan has never been more important.
Knowing that your hard-earned assets will go exactly where you want them to, without unnecessary taxes or legal battles, allows you to focus on living your life to the fullest. Your estate plan is ultimately about your legacy, not just the wealth you leave behind, but the values, traditions, and security you provide for the next generation.
