April 2022

An NRI with assets in India, and often assets abroad as well, is dealing with a more complicated succession picture than someone whose entire estate sits in one country, which makes a properly drafted will more important, not less.

For assets in India, Indian succession law generally governs how they pass, and which law applies (the Indian Succession Act, or personal laws depending on religion) depends on the individual’s personal law and the nature of the asset. Without a will, intestate succession rules take over, distributing assets according to a fixed legal formula that may not reflect what the individual would actually have wanted, and that can differ meaningfully depending on which personal law applies to them.

A will covering Indian assets should ideally be executed in India, referencing Indian assets specifically, and registered where appropriate, since a will drafted purely under a foreign jurisdiction’s format can create complications when it needs to be probated or recognised by Indian authorities. Many NRIs with assets in both India and their country of residence choose to have two separate wills, one for each jurisdiction, carefully drafted so that one doesn’t inadvertently revoke the other, a mistake that happens more often than people expect when wills are drafted independently by advisors unaware of each other.

Executors and witnesses matter too. An executor familiar with Indian legal and banking processes, and able to act despite being outside India for parts of the process, makes probate considerably smoother than naming someone unfamiliar with the system.

Nomination on individual bank accounts, demat accounts, and insurance policies is worth aligning with the will as well, since nominees hold assets in trust for legal heirs under Indian law in most cases, but a will that contradicts nominations can create confusion for a family already dealing with loss.

Ashutosh Financial Services regularly helps NRI families think through this cross-border succession planning well before it becomes urgent. Ashutosh Financial Services continues to run sessions on estate and will planning specifically for the NRI community.

Most investors, if asked honestly, want two contradictory things at once: they want their capital to be safe, and they want it to grow meaningfully. Strategies built around capital protection with growth exist precisely because that tension is real, not because it can be fully resolved.

The general architecture behind these strategies is a split allocation: a large portion of the investment goes into secure, fixed-income instruments, sized so that its guaranteed maturity value equals the original capital invested, while a smaller portion is allocated to equity or equity-linked instruments for growth potential. If the equity portion performs poorly, the fixed-income portion has, by design, grown back to cover the original capital. If the equity portion performs well, the investor participates in that upside on top of capital preservation. This is the logic behind capital-protection-oriented mutual fund schemes and certain structured products, though the specific mechanics vary by product.

The trade-off is straightforward and worth internalising: since only a portion of the corpus is exposed to growth assets, the upside is inherently capped relative to a pure equity investment. An investor chasing maximum long-term returns will likely find these structures too conservative. Someone whose primary anxiety is capital loss, and who is willing to accept a lower return ceiling in exchange for a return floor, finds the trade-off worthwhile.

It’s also worth noting that “capital protection” in these products generally refers to protection of the principal amount invested, typically assessed at maturity, not a guarantee against interim volatility. An investor exiting early can still see less than the original capital back, since the protection mechanism depends on the fixed-income portion running its full course.

Ashutosh Financial Services helps investors evaluate whether this kind of structure genuinely fits their risk appetite and time horizon before committing capital. Ashutosh Financial Services continues its investor education efforts around structured and hybrid investment strategies.

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