estate planning | wealthymatters

Here’s a story from the past:Back in 1936, Shapoorji Pallonji Mistry (grandfather of Cyrus Mistry) acquired around 12.5% of Tata Sons after the death of FE Dinshaw, from his estate. Dinshaw had been a frequent financier for the Tatas and had converted debt to equity to get his shares in Tata Sons. He wanted his shares to go into a trust after his death, but somehow Shapoorji Mistry prevailed upon his managers.And then in a master-stroke Shapoorji acquired another 6% from JRD Tata’s brother Darab, who sold, it is said, to spite his elder sibling, who was hogging the limelight at the Tatas. But Shapoorji’s adventure had to stop there, as the sons of JN Tata Ratanji and Dorabji had already arranged their own holdings, adding up to 80%, into charitable trusts before their deaths. ( JRD and Darab were descendents of Dadabhoy Tata, a partner and cousin of JN Tata’s father Nusserwanji Tata.)

The Tata Trusts are probably the most well known in India.Using trusts, either charitable ones like these or private ones with private beneficiaries, was popular in India till the ’80s to bequeath assets to progeny. Between the 80s and the ’90s, private trusts went through a period of highest taxation and lost their popularity. Today, they seem to be the flavour of the season again. Along with popularity have come services that set up trusts and help manage them. Apart from the tax pressure on trusts being eased in early 2000, some high-profile inheritance drama helped. Read more of this post

Filed under Paper Assets, Tool Kit Tagged with Amicoro Trustee India Pvt Ltd, charitable trusts, Cyrus Mistry, Dadabhoy Tata, Darab Tata, Dorabji Tata, estate duty, estate planning, Heritage Trust, IL&FS Trust Company Ltd, inheritance tax, JN Tata, JRD Tata, Kotak Mahindra Trusteeship Services, Merrill Lynch Trust Services, Nerine Trustee Company Pvt Ltd, Nusserwanji Tata, postaday, private trusts, Ratan Tata, Ratanji Tata, Sailesh Haribhakti, Shapoorji Pallonji Mistry, SNG & Partners, Tata Sons, Universal Trustees, Warmond Trustees and Executors

Make Your Will Online

August 27, 2014 Leave a comment

wealthymatters NSDL e-Governance Infrastructure and Warmond Trustees and Executors have gotten together now to offer will-making services to the masses through their website EzeeWill.com.

India witnessed an exponential rise in the number of rich people following the economic boom that started in early 2000 and continued for more than seven years. The recent economic revival after the slowdown for more than five years is likely to boost disposable incomes, leading to a growing demand for succession planning.

NSDL, which maintains pension accounts of over 70 lakh Indian citizens apart from depositories like tax information network, is managing the online infrastructure to submit relevant data, while Warmond has engaged a panel of lawyers to study the data and prepare the wills for all communities across India.

The cost of making a will through this new online channel will be Rs. 4,000, whereas a traditional form of will-making through lawyers will cost anywhere between Rs 25,000 and Rs.1,00,000.So this initiative makes available a proposition at one-fifth the cost even at a lower-end.

Filed under Theory, Tool Kit Tagged with estate planning, EzeeWill.com, making a will, making a will online, NSDL e-Governance Infrastructure, postaday, succession planning, Warmond Trustees and Executors

The World’s Biggest Life Insurance Policy

March 19, 2014 1 Comment

wealthymatters

Guinness World Records has announced the World’s Biggest Life Insurance Policy ever issued.

However,neither the record keeper nor the issuer would say who is covered by the massive policy.Dovi Frances, the adviser who arranged the policy, would only say it went to a well-known technology billionaire from California.

The wealthiest of the wealthy often buy life insurance for several reasons.Primary among them are tax purposes.In many countries,a wealthy estate is often hit with a hefty tax bill, and there may not be enough cash to cover it, since many millionaires and billionaires hold their wealth in investments.

This $201 million policy overtakes the previous record of $100 million.It is more complicated than most. It’s underwritten by 19 different insurance companies, each with a slice of less than $20 million. If a single company took the risk of the whole policy they would go into bankruptcy if a claim were to be made.

The yearly premium is in the low single-digit millions.