How estate planning plays crucial role in preserving wealth

Common misconceptions

As per Shah of IndusLaw, estate and succession planning are often seen as taking away self-control and giving control to future generations. However, one of the prominent reasons to undertake estate planning is to have the freedom to do as you wish and to give legal authority to your preferences, which the intestate rules may not provide for.

Pathak of Warmond emphasises, “A private trust can be structured in a way that the settlor or entrepreneur retains control over the assets during their lifetime.

Another misconception that some individuals have is that private trusts should only be created by the elderly, which is also incorrect. It is important for people of any age group who have created wealth to preserve it and have a sound succession plan in place.”

According to Dutta, one common belief is that succession planning can be done without professional help; however, it is a complex process that requires expert guidance to ensure compliance with legal requirements.

Another misconception is that insurance can replace succession planning. In reality, insurance serves a different purpose—while it indemnifies losses, succession planning is focused on preserving wealth for future generations.

Additionally, some people think that estate planning is solely for tax avoidance. While minimizing tax liabilities can be a benefit, the primary goal is to protect and transfer wealth to beneficiaries, thereby preventing disputes.