The principal advantages of the family trust over a will are continuity, flexibility, and protection. A trust can hold assets across multiple generations without the need for probate proceedings on each death — the trust continues regardless of the deaths of individual trustees or beneficiaries, and a new trustee can be appointed without the need for court proceedings. A discretionary trust gives the trustee the power to decide how to distribute income and capital among the beneficiaries — allowing the family's circumstances to be taken into account at each distribution, rather than locking in a fixed allocation that may not reflect the family's needs in twenty years' time.
The trust also provides a degree of asset protection that a will does not — assets held in trust are generally not available to the personal creditors of individual beneficiaries, and are not subject to the insolvency of a beneficiary who has not yet received a distribution. For business families where individual members carry personal liability for the family business, the trust provides a ring-fence between the business risk and the family's residential and investment assets. GP structures private family trusts as an integral component of the overall estate plan — not as a standalone document.
Drafting of discretionary family trust deeds — in which the trustee has the power to decide how to distribute income and capital among a defined class of beneficiaries, having regard to their individual circumstances at the time of each distribution. GP structures the deed to identify the settlor, the initial trustees, the protector (where appointed), the class of beneficiaries, the trustee's investment and distribution powers, and the mechanism for appointing new trustees. Registration with the Sub-Registrar where the trust holds immovable property.
Comprehensive trust structuring for HNI and business families — integrating the family trust with the will, HUF arrangements, and business succession plan. GP maps the family's complete asset picture, identifies the assets most appropriate for trust holding (typically residential properties, investment portfolios, and liquid assets — not operating business assets, which carry different structuring considerations), and builds the trust structure to achieve the family's objectives for generational wealth transfer.
A testamentary trust is a trust created by a will — it comes into existence only on the testator's death and is constituted by the transfer of the estate assets to the trustees named in the will. Testamentary trusts are particularly useful where the beneficiaries include minor children (whose share would otherwise be managed by a court-appointed guardian), incapacitated adults, or beneficiaries who cannot be trusted to manage capital responsibly. GP drafts the testamentary trust provisions within the will and advises on the trustee's powers and the distribution mechanism.
Trust structures for NRI families — where the settlor, trustees, or beneficiaries are non-resident Indians subject to FEMA restrictions on the acquisition, holding, and transfer of immovable property in India. GP advises on the FEMA position of each party to the trust, the RBI permissions required for the trust to hold Indian immovable property with NRI participation, the repatriation of distributions from the trust to NRI beneficiaries, and the interaction between the Indian trust and any overseas trust or estate planning structure the family maintains.
Ongoing advisory to trustees on the exercise of their powers and duties — including investment decisions, distribution decisions, the admission of new beneficiaries, and the appointment of new trustees. GP advises trustees on their legal duties under the Indian Trusts Act 1882 (including the duty of care, the duty to act unanimously, and the duty to keep and render accounts), and on the exercise of discretionary powers in a manner that will be defensible if challenged by a disappointed beneficiary.
Litigation of trust disputes — claims by beneficiaries against trustees for breach of trust, misappropriation of trust assets, or failure to exercise discretionary powers properly; and defences for trustees against claims by disgruntled beneficiaries. GP files suits for breach of trust, applies for the removal of a trustee who has acted in breach, seeks accounts and inquiries of trust income and expenditure, and pursues recovery of trust assets that have been misapplied.
A protector is a person appointed in the trust deed with the power to supervise the trustees — typically with the power to veto certain trustee decisions or to remove and replace trustees who are acting contrary to the settlor's intentions. For family trusts where the trustees are professional advisers unknown to the family, or where the family does not trust a particular trustee to exercise discretion correctly, a protector (typically a trusted family member or adviser) provides an additional check. GP advises on whether a protector is appropriate and on the scope of the protector's powers.
The taxation of private trusts under the Income Tax Act 1961 depends on whether the trust is specific (with identified beneficiaries and fixed shares) or discretionary (with no fixed shares). Specific trusts are typically taxed at the beneficiaries' individual rates; discretionary trusts are typically taxed at the maximum marginal rate of 30% — which reduces the income tax advantage of the trust structure. GP advises on the tax implications of each trust structure before the deed is executed.
Under the Registration Act 1908 and the Transfer of Property Act 1882, a trust deed that declares a trust of immovable property must be registered with the Sub-Registrar of Assurances. A trust of movable property only (shares, bank deposits, investments) does not require registration. Failure to register a trust of immovable property renders the trust deed inadmissible in evidence — which can make it impossible to enforce the trust against third parties. GP manages the complete registration process for every trust it drafts.
Most trust deeds drafted in India are never administered. The assets are never formally transferred into the trust, the trustees never keep the accounts the deed requires, and the deed is discovered in a drawer after the settlor's death — at which point the trust cannot easily be constituted. GP follows every trust deed with a transfer-in protocol — ensuring that the assets are actually vested in the trustees, the trust accounts are opened, and the trustees understand their ongoing obligations. A trust that is not administered is not a trust.
The tax position of a private trust is complex — and the choice between a specific trust and a discretionary trust has significant income tax consequences. For trusts with NRI participation, the FEMA position of the settlor, trustees, and beneficiaries must be analysed at the time of drafting. GP's trust advisory integrates legal, income tax, capital gains, and FEMA analysis — ensuring that the trust structure is sound across all dimensions before the deed is executed and the assets are transferred.
A family trust that is inconsistent with the will, or that overlaps with the HUF structure, or that holds assets also covered by the business succession plan, can create exactly the disputes it was designed to prevent. GP builds every trust as a component of the overall estate plan — checking that the trust deed, the will, the HUF arrangements, and the business succession plan are all consistent, complementary, and collectively effective in achieving the family's objectives.
Advised the patriarch of a Mumbai trading family on the establishment of a discretionary family trust to hold a ₹90 crore portfolio of residential properties, listed shares, and fixed deposits — for the benefit of his wife, three adult children, and their respective families. GP drafted the trust deed with a protector (the family's chartered accountant of 30 years), registered the deed with the Sub-Registrar, transferred all immovable property into the trust by registered conveyance deeds, and coordinated the trust structure with the patriarch's will (which dealt with his personal assets) and the family's existing HUF arrangements. The trust was designed to provide for the patriarch's wife during her lifetime and then distribute capital to the adult children and their families on a discretionary basis across the following generation.
Advised a Singapore-resident NRI on the establishment of an Indian family trust to hold a Delhi residential property valued at ₹8 crore — for the benefit of the NRI's India-resident parents during their lifetimes and then for the NRI's two children (one India-resident, one Singapore-resident). GP advised on the FEMA position of the NRI settlor (NRIs can hold immovable property inherited from a resident Indian), the appointment of India-resident trustees (required for an Indian trust of Indian immovable property), and the mechanism for repatriating the net sale proceeds to the Singapore-resident beneficiary after the parents' lifetimes — including the requisite RBI and FEMA compliance steps.
Advised a beneficiary of a family trust created by her deceased father — who discovered that one of the two trustees (her brother) had been collecting rental income from three trust properties over seven years without accounting to the other beneficiaries. GP filed a suit in the civil court for an order requiring the trustee to render accounts of all income received by the trust, obtained the accounts order and a freezing injunction preventing the trustee from dissipating the income collected, and secured a decree for payment of the rental arrears — amounting to approximately ₹2.3 crore — plus interest. The trustee was also removed by the court and replaced with a professional trustee appointed on the recommendation of the parties.
The practice handles the complete trust lifecycle — from structuring and deed drafting through registration, asset transfer-in, trustee advisory, and administration; to trust disputes where beneficiaries or trustees require litigation support. For NRI families, the practice coordinates with FEMA specialists and, where necessary, with overseas counsel on the interaction between the Indian trust and the family's overseas estate planning structures.
Every trust GP establishes is integrated with the family's complete estate plan — will, HUF, and business succession — to ensure consistency and effectiveness across all components.
A plain-language guide to when a private family trust adds value over a will alone — and the structuring decisions that determine whether a trust will function effectively across generations.
Read Guide →The income tax implications of specific and discretionary trusts under the Income Tax Act 1961 — and how the structure of the trust deed determines which rate applies to trust income.
Read Insight →Whether you need a family trust drafted, an existing trust reviewed, FEMA advice on an NRI-connected trust, or representation in a trust dispute — speak to us today.
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