“Ring-fenced structures are created so that each member of the family is assigned a specific portion within a trust. Specific people are appointed to manage specific trusts within a broader trust structure so that assets are further ring-fenced. Family councils are created and hierarchies established, where the first level of conflict is resolved at that level, and if the dispute continues, it moves to the next level. Arbitration councils are also designed,” said Rajkumar Subramanian, head of products and family offices at PL Wealth Management, to Business Standard.
As family businesses in India grow, the aim is to prevent disputes from reaching the courts. Some groups have listed entities, and legal disputes can affect stock valuations and, in turn, retail shareholders. Sona Comstar chairman Sunjay Kapur’s untimely demise, which triggered a publicly drawn-out legal battle over his estate between his mother Rani Kapur, former wife Karisma Kapoor and current wife Priya S Kapur, is the most recent example.
“Depending on the complexity of the family, the size and type of holdings, and whether entities are listed or unlisted, many of these mechanisms are being put in place. This is especially true where listed entities are involved, because once these conflicts come out in the open, they can affect the pricing or market capitalisation of the listed companies. A lot of people’s wealth is at stake,” he added.
Heads of family businesses are also shifting towards more equitable distribution of wealth, rather than placing all assets under a single trust with designated beneficiaries, or simply writing wills allocating parts of the business to their childr en, both approaches that are increasingly becoming subj- ect to litigation.
“Families are also formalising family charters, supported by shareholder agreements and company policies, to clearly distinguish ownership from management and reduce future governance-related disputes,” said Dhruv Chopra, managing partner at chartered accounting firm Dewan PN Chopra & Co.
Broadly, family wealth is divided into business assets and personal assets, both of which require structured succession planning. One structure gaining traction is the private family trust. Under this approach, business and personal assets are settled into one or more trusts and administered by trustees strictly in accordance with a highly customised trust deed. The deed defines how assets are to be held, managed, and distributed, and how income and capital are to be used for the benefit of present and future generations. This detailed codification helps preserve capital, enable long-term wealth creation, and facilitate a smoother generational transition while addressing family-specific concerns.
“As high-networth families in India accumulate significant wealth, succession planning has become a critical priority to prevent disputes and ensure continuity across generations. Family conflicts often arise when there is ambiguity around ownership, control, and entitlement, particularly when multiple beneficiaries with differing capabilities, interests, and lifestyles are involved,” Chopra added.
Experts also pointed to newer challenges such as unstable marriages, which may lead to maintenance claims or demands for a share of family assets. Complications may also arise from remarriage to partners of a different nationality, with claims filed in other jurisdictions. “Families with more diversified asset holdings are now examining these aspects more closely to ensure mitigation measures are incorporated — risks that were not fully envisaged a few years ago,” Subramanian added.
Succession remains one of the most emotionally and operationally complex areas for Indian family businesses. According to PwC’s 12th Family Business Survey, which covered 1,325 family business leaders globally, including around 40 from India, 36 per cent of Indian family businesses had no clear succession plan, compared with 28 per cent globally. The need for family businesses to evolve is becoming more pressing.
“You need families to think and operate professionally to remain competitive, and you need professionals to be as entrepreneurial and empathetic as a family member would,” fifth-generation industrialist Priyavrata Mafatlal, vice-chairman of Arvind Mafatlal Group — which itself emerged after years of legal battles rooted in family succession — told Business Standard in a recent interview.
A firewall for family fortunes
Family councils and charters settle disputes early before they reach courts
Trustees manage defined portions of wealth
Multi-tier resolution mechanisms cut litigation risk
Private trusts codify asset rules
Succession factors remarriage, complex holdings, and cross-border claims