Less than 50% of Indian business families have a succession plan: Report

Despite growing wealth, most Indian business families delay succession planning, risking disputes and dilution

As India enters one of the largest intergenerational wealth transfers in its history, fewer than 50 per cent of Indian business-owning families have a formally documented succession plan in place, according to insights shared by Entrust Family Office, which advises several of India’s leading business families.

 

The data points to a growing gap between rapid wealth creation and preparedness for wealth transition. While family enterprises and high net worth individuals have seen sharp asset growth over the past decade, formal planning around ownership, leadership, and governance has not kept pace.

 

Awareness is high, action limited

Most business families recognise the importance of succession planning, but many struggle to move from intent to execution. “The real challenge lies in starting these conversations early and giving families and heirs the right structure,” said Rajmohan Krishnan, principal founder and managing director, Entrust Family Office. As wealth shifts across generations, he said, long-term success will depend not only on how wealth is created, but on how thoughtfully it is governed and transferred.

 

Even among families that have documented succession plans, clearly defined timelines for leadership transition remain uncommon. Leadership changes are often reactive, triggered by health issues or unforeseen events, rather than planned and phased handovers.

 

Why transitions get delayed?

According to Entrust Family Office, delays are usually driven by a combination of emotional and practical factors, including reluctance to relinquish control, uncertainty about the next generation’s readiness, and lack of clarity on future leadership roles.

 

In the absence of structured planning, families face risks such as ownership fragmentation, internal disputes, and erosion of enterprise value. In some cases, otherwise profitable businesses are diluted or sold because transitions were not resolved in time.

 

Changing structures and priorities

Indian business families are also undergoing a structural shift, increasingly separating ownership from management. Many families are choosing to remain long-term custodians of capital, while professional teams handle day-to-day operations. The next generation is focusing on diversification, transformation, and new ventures alongside legacy businesses, with nearly 80–90 per cent seeking exposure beyond the core enterprise.

 

Once families adopt structured investment frameworks, diversification becomes central to wealth preservation. Alternative assets are gaining importance, while gold continues to be valued as a legacy asset for intergenerational continuity rather than short-term liquidity.

 

Legacy beyond wealth

Succession planning today goes beyond business leadership. Philanthropy is becoming more deliberate, with families earmarking 5–15 per cent of their estate for charitable causes. Participation of women in governance and succession decisions is also rising, with capability and willingness increasingly taking precedence over tradition.

 

Entrust Family Office notes that formal governance structures, along with tools such as wills and trusts, are now integral to succession planning. In contrast, startup founders tend to engage in succession and estate planning earlier, especially ahead of private equity investments or public listings.