SC order on personal guarantors thorn in the side of biz families

Lack of clarity between legitimate succession planning and evasion is a worry, say experts

Business families that have undertaken estate planning over the past two-three years are a worried lot. 

Following last week’s Supreme Court (SC) order on personal guarantors under the Insolvency and Bankruptcy Code (IBC), emboldened lenders are expected to enhance scrutiny of any recent estate planning measures by debt-laden promoter groups, including those by personal guarantors, said legal experts. 

Over the past few years, there have been increasing number of instances of business families taking steps to ring-fence personal assets from business risks. 

Legal experts pointed out that moving sizeable personal assets into family-controlled trusts — as part of the estate and succession planning