Estate Planning for Indian Residents with Global Assets

Introduction

Over the last two decades, Indian family wealth has spread across borders - UAE property, US stock portfolios, Singapore holding structures, UK bank accounts, offshore trusts. But succession law has not kept up with this expansion of wealth. Every jurisdiction is governed by its own inheritance rules, probate procedures, and tax regime. Which most of the time do not operate in tandem. This creates a structural problem that is at the centre of cross-border estate planning.

The reason this fragmentation causes problems comes down to three variables that rarely align in a global estate: domicile - which determines which country's personal succession law applies; residency - which drives tax obligations; and the situs of each asset - where it is legally located. In a purely domestic estate, these three point in the same direction. However, once wealth crosses borders, they frequently do not and every jurisdiction where they diverge will apply its own rules to whatever falls within its reach, regardless of what your Indian will says or what you intended. However, once wealth crosses borders, these variables often do not align, and each jurisdiction would enforce its own rules over any assets where differences arise irrespective of what an Indian will or what is originally intended.

For example: an Indian resident holding US-listed securities, even through an Indian brokerage may be exposed to US estate tax mainly because the situs of those securities is in the US. According to the IRS, non-resident aliens can only claim an US estate tax exemption of only $60,000 (compared to $15 million as of 2026 for US citizens and residents). A portfolio of $2 million in US equities with no planning in place could trigger a tax bill in the hundreds of thousands, payable by heirs, in dollars, within nine months of death. This surprises most Indian families as estate duty has been abolished in 1985 in India, and there's a natural assumption that what applies here applies everywhere. It doesn't.

Why Cross-Border Estate Planning Matters More Than Most Families Realise

Effective cross-border estate planning begins with knowing precisely what you own and where it is situated. Overseas financial accounts carry their own probate and reporting requirements; foreign shares, ESOPs, and startup equity are governed by the laws of the jurisdiction that issued them; offshore trusts raise questions of control, beneficial ownership, and tax treatment; digital assets remain legally unsettled on questions of custody and transfer; and cross-border business interests require continuity planning covering both ownership and operational control. Mapping each asset against the relevant jurisdiction is not a preliminary exercise it is the foundation on which everything else is built.

In practice, the most common failure is not missing documents but structural misalignment between where assets sit, which laws govern them, and what the family expected to happen. Where assets are held across multiple countries, heirs are often required to initiate separate probate proceedings in each jurisdiction simultaneously. In the UAE, Muslim estates are administered under Sharia succession principles while non-Muslim expatriate estates are handled through separate courts; an Indian will carries no automatic legal standing in either without local registration. In France and Spain, both the réserve héréditaire and the legítima reserve a fixed minimum share of the estate for children that no will can override, an Indian national intending to leave French property entirely to a spouse may find French law does not permit it. In India, nominations on fixed deposits, mutual funds, and insurance policies are widely mistaken for beneficiary designations; whereas a nominee is legally a custodian, obligated to pass the asset to the rightful heirs. Foreign estate taxes come with hard payment deadlines i.e. nine months in the US, six in the UK, leaving illiquid estates with little choice but to sell at whatever price the market offers at the time.

What a Properly Designed Plan Looks Like

There is no single standard template in estate planning, every plan is shaped by what a family owns, the situs of assets, and their goals. That said, most well-constructed plans work across four consistent layers. The starting point is always having separate wills for each jurisdiction where assets are held. A single Indian will has no automatic legal standing in most foreign courts. Drafting separate wills under local law in each relevant country which are carefully coordinated so they do not accidentally revoke each other. It does not amount to duplication but helps avoid probate friction across jurisdictions.

Where families want assets managed and distributed in a controlled way across generations, a trust structure is often the most effective tool. Assets held in trust sit outside the estate, bypass probate, and pass on terms the settlor sets, rather than being subject to whatever succession law happens to apply at the time of death. For Indian residents, how an offshore trust is treated under Indian tax law, including whether anti-avoidance provisions apply, needs to be worked through carefully before any structure is put in place.

For families with global businesses or investment portfolios spread across multiple countries, a holding entity brings succession to a single point. Rather than administering assets country by country, ownership transfers at the shareholding level which is simpler, faster, and considerably less exposed to foreign probate and estate tax complications. Finally, liquidity planning, typically through life insurance ensures that when foreign estate taxes fall due, heirs are not forced to sell property or business interests under time pressure simply to meet a government deadline.

Indian Compliance Obligations

Whichever structures are put in place abroad, the obligations under Indian law do not stop at the border and understanding them is as much a part of estate planning as the structuring itself. Every foreign asset held by an Indian resident must be disclosed annually under Schedule FA of the Income Tax Return, and all foreign income, whether from dividends, rental yields, capital gains, or trust distributions is fully taxable in India and must be reported accordingly in line with The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The overseas investments must equally remain within the boundaries set by the Foreign Exchange Management Act and the Liberalised Remittance Scheme.

Where offshore trusts or holding structures form part of your estate plan, their legal and tax characterisation under Indian law is just as important as how they function abroad. Income from certain offshore structures can be clubbed back into your personal income under Indian domestic provisions, GAAR can apply where a structure lacks genuine commercial substance, and double taxation relief under applicable tax treaties requires proper disclosure and documentation to access. Compliance with Indian law is not something to address once the planning is done. It shapes what is available to you, what can be structured, and what must be disclosed from the very first decision.

How we can help

At Water & Shark, we work with Indian families whose asset exposure spans multiple jurisdictions, where estate and succession planning requires coordinated legal, tax, and structuring advice rather than documents alone. We help design and implement the appropriate structure, whether that involves multi-jurisdiction wills, trusts, holding entities, or liquidity planning, working alongside your existing advisors throughout.

Beyond structuring, we advise on the longer-term governance framework that keeps a global estate coherent across generations, including succession planning, stewardship arrangements, and family governance protocols. If you have not revisited your estate plan with the international picture in mind, that is worth addressing now. The problems that arise in cross-border estates are almost always the result of planning that was never done.

FAQ’s - Frequently Asked Questions

1. I have a will drafted in India that covers all my assets. Is that not sufficient for my foreign holdings?**

A domestic Indian will has no automatic legal standing in most foreign courts and must either be resealed locally or supported by separate jurisdiction-specific wills. Beyond recognition, foreign courts apply their own succession rules, in jurisdictions with forced heirship regimes such as France or Spain, local law can override your testamentary intentions entirely, regardless of what your Indian will says.

2. My US investments are held through an Indian brokerage account. Am I still exposed to US estate tax?

Yes. US estate tax liability is determined by the situs of the asset, not where the account is held. US-listed securities are treated as US-situs assets under the Internal Revenue Code irrespective of whether they are held through an Indian brokerage.

3. We have an offshore trust as part of our estate plan. Does that resolve our Indian compliance obligations?

Not automatically. Income within certain offshore structures can be attributed back to you personally under Indian domestic tax provisions, GAAR applies where a structure lacks genuine commercial substance, and disclosure obligations under Schedule FA and the Black Money Act remain fully applicable regardless of how the trust is structured abroad.

4. How does an Indian nomination on a mutual fund or insurance policy interact with my estate plan?

A nominee is not a beneficiary, they are a custodian, legally obligated to pass the asset to the rightful heirs as determined by succession law or your will. Treating a nomination as a beneficiary designation is one of the most common misconceptions in Indian estate planning and can create significant complications at the point of distribution.

5. At what point should we be looking at cross-border estate planning, is this only relevant above a certain asset threshold?

The threshold question is less about total value and more about jurisdictional spread. A family with modest foreign holdings across two or three jurisdictions faces the same structural legal problems as one with significantly larger exposure, parallel probate risk, forced heirship rules, and Indian compliance obligations apply regardless of quantum.

Author’s Name

Deonn Lobo

(Legal  Associate at Water & Shark)

Disclaimer

The views and opinions expressed in this article are solely those of the author. They do not necessarily reflect the official position, policy, or perspective of Water & Shark.