Ahmedabad: Private trusts are emerging as a preferred estate planning tool among affluent and business families in Gujarat, with advisers noting a steady rise in their adoption across major commercial centres. Traditionally, wills were the primary route for succession planning in India, but many families are now opting for trusts to ensure smoother wealth transfer, stronger asset protection and continuity in business ownership.Estate planners said private trusts are increasingly being preferred because they help reduce the scope for succession disputes, avoid probating for assets held within the trust and create a formal structure for managing wealth across generations. They are also being used to safeguard minors, vulnerable beneficiaries, and family assets from personal or business-related risks. “Private trusts have become an integral part of modern estate planning in Gujarat because they combine succession planning, asset protection and family governance in one structure,” said chartered accountant Anup Shah, who is based in Mumbai but practices trust formation for Gujarat-based corporates and HNIs. He said the number of families adopting such structures has increased significantly over the past few years, especially among high-net-worth individuals and promoter-led business groups. One example cited by advisers involved the managing director of a large export-oriented company who created a lifestyle corpus trust for the benefit of his wife and children. He transferred his bungalow and a financial corpus into the trust before any financial stress surfaced in his business. When the company later entered bankruptcy and claims were raised against him, the assets already settled into the trust remained protected. Advisers said such cases show trusts are most effective when established proactively rather than after financial trouble begins. Another growing trend is the use of trusts by promoter families to separate ownership from management. In one case, a business family transferred promoter shareholding in listed companies into a private trust after securing the required approvals under takeover regulations. The arrangement allowed economic benefits and voting rights to remain within the family while operational management was handed over to professionals. Advisers said such structures are increasingly seen as a way to preserve promoter control while maintaining corporate governance and succession clarity. Ahmedabad-based chartered accountant Yash Shah said, “Discretionary irrevocable trusts are being formed for succession planning with defined rules and guidelines. They can also provide protection against bankruptcy, and many families with children living abroad are now creating such trusts.” Trusts are also being used for planning for minors. In one instance, a senior citizen created an irrevocable private trust for his two minor granddaughters and transferred substantial wealth, including money, bullion, jewellery, tax-free bonds and securities. The trust deed specified that the funds could be used for education, marriage, medical needs, comfort and lifestyle, with the trust continuing until the younger granddaughter turned 35. Pre-marriage planning has also emerged as a notable use case. In one diamond business family, an irrevocable discretionary trust was created for the benefit of a son and his mother before the son’s marriage. Because much of the wealth was held through the trust rather than directly in the son’s name, the family viewed it as an added layer of protection in case of future marital disputes.
