'Gen Next's preferences lean toward globally diversified portfolio'

While many first-gen entrepreneurs are now more intentional and strategic about succession, the movement from informal conversations to formal planning is still a gradual and ongoing process

Many founders avoid sharing the Will with their families, fearing disputes due to which inheritors are often caught off guard, with no clear understanding of their roles or responsibilities, says Sneha Makhija, head of wealth planning at Sanctum Wealth in an email interview with Devanshu Singla. There are over ₹2 lakh crore of unclaimed financial assets in India - largely because their heirs are ill-equipped to locate or manage it, she added. Edited excerpts:

 

How do you think first-generation entrepreneurs are approaching business succession today?

 

Historically, succession planning was often deferred by first-generation entrepreneurs. Today, that mindset is gradually evolving. There is a growing recognition of the value in identifying successors early and laying down a clear roadmap for transition. Yet, for many, real action still comes only after a trigger event such as a health issue, legal complication, or family friction.

 

Founders often view their enterprise as an extension of themselves. Their emotional investment in both family and business makes the prospect of handing over the reins, especially fully, an intensely personal and difficult decision.

 

While many first-gen entrepreneurs are now more intentional and strategic about succession, the movement from informal conversations to formal, structured planning is still a gradual and ongoing process. The willingness is emerging, but the execution is still catching up. 

 

How are high-net-worth families using trusts to enable long-term governance and multi-generational alignment?

 

High-net-worth families around the world are increasingly using trust structures not just for tax efficiency or asset protection, but as strategic tools for long-term governance, business continuity, and multigenerational alignment.

 

Trusts offer a flexible and customisable framework for holding family wealth under a single umbrella. By placing business shares within the trust, families can ensure that ownership remains consolidated while allowing for the professionalisation of management. This structure supports a smooth succession process, preserves the family legacy, and maintains alignment between ownership and long-term vision.

 

To strengthen governance, many families are now embedding family governance mechanisms directly into the trust deed. These include structured communication forums, conflict resolution protocols, and clear guidelines on how the family wishes to operate collectively across generations.

 

Discretionary trusts further allow for distributions to be made based on need, rather than entitlement.

 

How is the growing influence of next-gen family members shifting the priorities or risk appetite in wealth management?

 

The next generation emphasises capital growth, innovation, and global exposure. Their preferences lean toward globally diversified portfolios, featuring asset classes like international equities, venture capital, private equity, digital assets, and thematic investments focused on sectors such as climate tech, AI, healthcare, and ESG.

 

The next-gen often seeks investments that align with their personal beliefs and societal impact, driving interest in impact investing, sustainable finance, and ‘profit with purpose’ over ‘profit at any cost.’

 

What structural or legal gaps do you commonly see in succession plans, and how are they evolving to address future complexities?

 

One of the most common structural gaps is the concentration on legal documentation only and treating it as a one-time legal exercise, typically limited to writing a Will. However, this narrow focus often overlooks the practical and operational aspects essential for effective succession.

 

For example, while a Will may outline who inherits what, it rarely addresses how inheritors are expected to take charge. Critical details, such as where the investments are held, how to access key financial accounts, or even where original property documents are stored, are frequently missing. As a result, heirs may be legally entitled to wealth but ill-equipped to locate or manage it.

 

Many patriarchs or founders avoid sharing the Will with their families, fearing disputes. This secrecy creates confusion, mistrust, and conflict. Inheritors are often caught off guard, with no clear understanding of their roles or responsibilities. The scale of this challenge is evident from recent data showing that over ₹2 lakh crore of financial assets remain unclaimed across Indian financial institutions.

 

Another common gap is the presence of outdated Wills that no longer reflect changes in family structure, assets, or jurisdictions. As family members move abroad and build cross-border lives, many succession plans remain India-centric and fail to account for international legal, tax, and regulatory implications such as impact of US estate tax, UK inheritance tax, or FEMA compliances. These oversights can lead to significant legal and financial complications.

 

There is a growing shift toward more holistic and future-ready succession planning. Professional advisors are encouraging families to adopt sophisticated structures while also building in regular reviews to ensure plans stay current. In parallel, estate planners are increasingly conducting family education sessions to equip the next generation with the knowledge, clarity, and confidence to step into their future roles when the time comes.

 

How are ultra-HNIs dealing with overlap between will-based succession and trust structures?

 

Ultra-HNIs are no longer choosing between a Will or a Trust, they are designing well-orchestrated, layered plans where both coexist, serving distinct but harmonised purposes. Wills and Trusts are complementary and not competing tools. The key lies in aligning each asset with the family’s broader objectives and structuring its transmission accordingly.

 

With rising awareness around estate planning and greater access to professional advice, families are beginning to understand the distinct roles that Wills and Trusts play. Wills are typically used to outline final wishes and to transfer assets that are easier or more cost-efficient to pass on upon death, while Trusts are favored for managing ongoing wealth, providing long-term control, and enabling smoother, dispute-free transitions, often across multiple generations.

 

What are some early indicators of potential succession-related disputes, and how can proactive planning help avoid them?

  Succession-related disputes rarely arise overnight, they tend to build gradually due to unspoken expectations, unclear roles, or unresolved family dynamics. Some common indicators of potential succession-related conflict include lack of clarity around future leadership, disparity in roles vs rewards, delay in succession decisions, and complex family structures.

 

Developing a well-integrated succession strategy, using legal tools like Wills, Trusts, and holding entities, provides not just clarity, but structure. Equally important is creating forums for open, transparent dialogue among family members, so they understand the rationale behind key decisions and feel included in the process. Engaging an independent professional estate planner can bring neutrality, objectivity, and strategic guidance, helping reduce the perception of bias and manage sensitive dynamics effectively.