Secure Your Legacy: Strategic Estate Planning for NRIs and PIOs

Legal Considerations for Non-Resident Indians and Persons of Indian Origin (NRI/PIO). Navigating the intricacies of property transfer for NRIs residing in foreign countries, especially when the property is

spread across India and abroad, can be a complex endeavor. This often raises fundamental questions, such as whether an NRI should draft a Will or rely on the laws of natural succession.

The decision-making process becomes even more challenging when considering whether to create a joint, composite, or common Will encompassing assets in both India and other countries. If a Will is chosen, it’s important to determine whether it should be registered and where the registration should take place. Additionally, NRIs must contemplate appointing different executors in distinct jurisdictions, or whether separate Wills for properties in India and abroad are more appropriate. If separate Wills are preferred, should they be registered individually in various jurisdictions? Furthermore, safeguarding the inheritance rights of beneficiaries, both in India and abroad, is a critical consideration. Lastly, the choice between Indian and foreign law in regulating NRI assets and properties across different countries raises additional complexities.

Our Professional Advice

For NRIs, the best course of action is to proactively execute a written Will, complete with witnesses and registration, to pre-emptively address potential complexities related to succession and inheritance. By clearly designating the intended beneficiaries, NRIs can mitigate the risk of speculative or illegitimate claims, ensuring a smooth transition of assets.

International law principles govern the succession of movable and immovable properties of Hindu NRIs residing outside India. As per these principles, the application of the Hindu Succession Act (HSA) of 1956 is delineated:

  1. For a Hindu domiciled outside India, the succession to immovable property in India falls under the purview of HSA 1956, while the succession to movable property adheres to the law of their foreign domicile.
  2. In cases where a Hindu is domiciled in India, succession to immovable property outside India is governed by the law of the country where the property is located, while movables outside India are subject to HSA 1956 or the local law of the foreign country where the property is situated.
  3. When a Hindu is domiciled outside India, the succession to their movable and immovable property outside India is not governed by HSA 1956 but by the law of their foreign domicile.

Given that the Hindu Succession Act is inapplicable outside India, it is strongly recommended that NRIs of Hindu origin, owning immovable assets in different countries, consider executing a comprehensive Will encompassing all their properties located in various jurisdictions. Crafting a single, composite Will is generally more practical and can be easier to authenticate than multiple separate Wills.

We also recommend that NRIs register the Will separately in each jurisdiction, even though this is optional in India. It’s important to note that the registration in a specific country generally applies to the properties of NRIs in that jurisdiction. Accordingly, adherence to the respective registration rules in foreign countries is imperative in line with the foreign domicile of the NRI.

Furthermore, NRIs should designate an executor in the specific jurisdiction where the property is situated, streamlining the asset division process according to the terms of the Will. A duly witnessed and registered written Will concerning Indian properties serves to identify claimants and legal heirs, with multiple registrations reinforcing its authenticity.

For an Indian Will to be considered valid, it should be attested by a Notary Public, undergo the process of obtaining an ‘Apostille’ stamp from the Foreign and Commonwealth Office, and receive a ‘consular’ stamp from the Indian High Commission. Ensuring precise drafting of the Will is also essential.

In conclusion, our advice to NRIs is to take proactive steps to simplify the inheritance process for their chosen heirs. Once executed, the law of the jurisdiction where the property is located will govern the succession process based on the rights established within the Will.

Why offers an all-encompassing solution, managing the entire process from start to finish. Our team of Will specialists is equipped to provide top-tier guidance on passing on your immovable property in India to your designated heirs, whether in India or abroad, in a tax-efficient manner.

We can assist in drafting, registering, and validating Wills for India, and offer expert advice on their validity. We can also provide guidance on the recognition and enforceability of a Will or probate order, often referred to as a ‘grant,’ in India.