Family fortunes, family feuds: 10 ways to stop inheritance from becoming a boardroom battle

Diwali is usually when India’s business families put aside their hectic schedules and come together. This year, however, many family gatherings used the opportunity to discuss a touchy subject: Succession.

With several generations under one roof, some families used the festive break to initiate conversations around inheritance, ownership and the future of their businesses. Firms working in the succession space, like Inheritance Needs Services, held awareness sessions for families, reflecting how the subject is moving from private contemplation to more structured discussions.

The urgency is understandable. With wealth spread across multiple family branches, businesses and asset classes, the challenge is no longer simply deciding who inherits what,but how to preserve ownership, ensure business continuity and prevent family differences from undermining the enterprise.


The biggest mistake a promoter can make is to treat succession as an inheritance problem. It is equally a governance challenge, a family relationship issue and a business continuity imperative. That is also the only way to avoid the next generation backstabbing one another for control of the family empire, a la the TV series Succession.

Here are 10 key safeguards promoters should put in place to ensure a smoother transition:

1. Draw up a family constitution

Do This: Put the rules of family participation in writing

Who can join the business? What qualifications and experience should they have? How will their compensation be decided? What happens when family members disagree? A family constitution should address these questions, along with the role of spouses, family councils and committees, and performance assessments.

Without agreed ground rules, perceptions of favouritism can quickly breed resentment.

The takeaway: Don’t let family members make up the rules as they go along.

2. Separate ownership from management

Do This: Decide who owns the business, who runs it and who makes key decisions.

Being an heir does not automatically qualify someone to run the enterprise. Successors should be identified on the basis of competence, experience and capability. An authority matrix should clarify decision-making powers, reporting responsibilities and the boundaries of individual roles.

For founders finding it difficult to let go, Rajmohan Krishnan, founder, Entrust Family Office, has a practical suggestion: Create a new designation such as chairman emeritus, mentor or guardian

The takeaway: Give the founder a graceful exit and the successor room to lead.

3. Consider a family trust to house ownership

Do This: Create a private family trust.

A properly structured private family trust can provide continuity, protect beneficiaries and establish a framework for wealth distribution across generations.

Rishabh Shroff, partner, Private Client Practice, Cyril Amarchand Mangaldas (CAM), says, “Business families are relying on combinations of trusts for owning their business assets and relying on wills for their real estate or property assets. Trusts are significantly safer than just relying on a will.”

Rajat Dutta, founder, Inheritance Needs, adds that a private family trust can also help ring-fence assets against business-related risks and matrimonial disputes.

The takeaway: Evaluate a trust structure, particularly for core business holdings and assets.

4. Don’t leave personal wealth to chance

Do This: Make a will that clearly spells out who inherits what.

Promoters often overlook personal wealth — real estate, financial investments, jointly held properties and other assets. These need to be inventoried and addressed separately.

A will should clearly identify beneficiaries, specify the distribution of assets and be consistent with existing trust arrangements. It should also be reviewed whenever there is a material change in family circumstances or asset ownership.

Shroff cautions against relying solely on a will for succession planning. A will comes into effect only after death and can be challenged by disgruntled heirs.

The takeaway: Every asset should have a clearly identified succession route.

5. For unlisted companies, put a shareholders’ agreement in place

Do This: Decide what happens when family members want to sell, transfer or monetise their individual holdings.

A shareholders’ agreement should spell out voting rights, share-transfer restrictions, rights of first refusal and exit arrangements. Relevant provisions should also be appropriately reflected in the company’s articles of association

Ketan Dalal, founder and managing partner, Katalyst Advisors, cites a case involving four siblings who jointly owned a company run by professional managers. A trust-based ownership structure and an interlocking arrangement helped protect the family’s collective promoter holding, even when individual members choose to exit.

The takeaway: Family members may have different ambitions, but the family’s collective interests need protection.

6. Groom the next generation; don’t simply appoint a successor

Do This: Start preparing potential successors.

The eldest son need not automatically be the next leader. Daughters have equal coparcenary rights.

Those who do want to join the family business should receive the right education, professional experience and exposure before taking on leadership roles. They should also be assessed on performance rather than family position.

“Family members must be mentally prepared to hand over responsibilities to a capable person,” says Kavil Ramachandran, former professor of family business, Indian School of Business (ISB).

The takeaway: Being born into a business family is not the same as being ready to run the business.

7. Account for changing family relationships

Do This: Succession planning must account for changes in family dynamics.

Marital discord within promoters’ families can complicate inheritance, ownership and wealth distribution.

Spouses, daughters-in-law and sons-in-law should therefore be encouraged to understand the family’s inheritance arrangements rather than being kept out of the conversation. Dutta also emphasises the importance of protecting vulnerable beneficiaries.

The takeaway: Relationships can change; succession arrangements must account for that possibility.

8. Professionalise the business

Do This: Make the company less dependent on individual family members.

Clear reporting structures, internal controls, professional management and independent oversight can help the business remain stable even when differences emerge within the promoter family.

This is particularly important for listed companies, where family disputes should not spill over into corporate decision making or affect public shareholders.

The takeaway: The institution must come first.

9. Plan for incapacitation, not just demise

Do This: Ask what happens if the promoter is suddenly unable to make decisions.

Succession planning should cover situations involving illness or incapacity, not just the eventual death. Banking mandates, authorised signatories, powers of attorney and interim leadership arrangements should be reviewed to ensure that the business can continue operating without disruption.

The takeaway: The business must know who takes charge if the founder cannot.

10. Review the plan periodically

Do This: Treat succession as an ongoing exercise, not a document signed and forgotten.

Marriages, births, deaths, divorces, new ventures and changes in ownership can all alter a family's succession requirements. Wills, trust deeds, family constitutions and shareholder arrangements must evolve accordingly.

The takeaway: A succession plan must grow and change with the family.

“Succession planning is hygiene, not surgery. Families that transition well are not the ones with the cleverest lawyers. They are the ones that started talking while everyone was still healthy, still sitting at the same dining table, and still willing to listen.” — Rajmohan Krishnan, founder, Entrust Family Office

“Family members must be mentally prepared to hand over responsibilities to a capable person.” — Kavil Ramachandran, former professor of family business, Indian School of Business (ISB)

“Business families are increasingly relying on trusts to hold business assets and wills to address real estate and other personal assets.” — Rishabh Shroff, partner, private client practice, Cyril Amarchand Mangaldas

“Private family trusts can ringfence assets against business risks and matrimonial disputes, protect vulnerable beneficiaries and provide flexibility in wealth distribution.” — Rajat Dutta, founder, Inheritance Needs.

“Listed companies operate within a regulatory framework that provides an institutional layer of protection even when differences emerge within the promoter family.” — Ketan Dalal, founder and managing partner, Katalyst Advisors