NRI Estate Planning: How to Create a Comprehensive Will Covering India and Abroad Assets

For NRIs settled in the USA, UK, Canada, Australia, or the Gulf, estate planning is uniquely complex. You likely own assets in two or more countries — a family home in Kochi, an ancestral property in Thrissur, and a house, retirement accounts, and investments abroad. Without a coordinated estate plan, your family could face years of legal battles across multiple jurisdictions.

Why NRIs Need Two Wills

The fundamental principle is lex situs — succession to immovable property is governed by the law of the country where the property is located (Section 5, Indian Succession Act 1925). This means:

• Your Kerala property will be governed by Indian succession law regardless of where you live.
• Your assets in the USA/UK/Canada will be governed by the law of that country or state.

A single will attempting to cover everything often creates problems:

The Revocation Trap

Under Section 70 of the Indian Succession Act, a later will revokes all earlier wills. If you make a will in the UK covering your UK assets, and it contains a standard clause revoking "all previous wills," your earlier Indian will may be deemed revoked — even if that was not your intention. The solution is to ensure each will explicitly states: "This will covers only my assets in [country] and does not revoke any will I have made in any other jurisdiction."

Indian Succession Law: What Applies to Your Kerala Property

Hindus

The Hindu Succession Act 1956 (as amended in 2005) governs intestate succession. Key points:

• Class I heirs (spouse, sons, daughters, mother) inherit equally.
• Kerala abolished the Joint Hindu Family system in 1976, so property vests as individual shares.
• Daughters have equal coparcenary rights under the 2005 amendment — confirmed by the Supreme Court in Vineeta Sharma v. Rakesh Sharma (2020).
• Probate is not legally required but increasingly demanded by banks and Sub-Registrars.

Christians

The Indian Succession Act 1925 governs succession. Probate is mandatory in Kerala for Christian wills. The estate is divided according to the ISA rules — spouse gets one-third, children share two-thirds equally.

Muslims

Muslim Personal Law (Shariat) Application Act 1937 governs succession. A Muslim can bequeath only one-third of the estate by will (the remaining two-thirds is distributed according to Shariat inheritance rules). This limitation is critical for estate planning.

Structuring Your Estate Plan

Step 1: Inventory All Assets

List every asset in India and abroad:

• Immovable property (land, houses, apartments) in Kerala.
• Bank accounts (NRE, NRO, savings accounts abroad).
• Investments (mutual funds, stocks, FDs in India; 401(k), ISA, pension abroad).
• Digital assets (crypto, online accounts).
• Insurance policies in both countries.
• Gold, jewelry, and valuables.

Step 2: Draft Two Coordinated Wills

• Indian will: Covers all Indian assets. Appoint an executor based in India (ideally in Kerala). Register this will at the Sub-Registrar's office for added security (optional but recommended).
• Foreign will: Covers all assets in your country of residence. Appoint a local executor. Follow the formal requirements of that jurisdiction (witnesses, notarization, etc.).
• Cross-reference: Each will should acknowledge the existence of the other and explicitly state it does not revoke it.

Step 3: Address FEMA Compliance

When your heirs inherit Indian property, FEMA rules govern what they can do with it:

• NRI/OCI heirs can hold inherited property (including agricultural land, which they cannot purchase).
• Sale proceeds can be repatriated up to USD 1 million per financial year from the NRO account, subject to tax compliance.
• Ensure the will includes instructions for FEMA-compliant transfer.

Step 4: Minimize Cross-Border Tax Exposure

• India: No inheritance tax, but capital gains tax applies when heirs sell inherited property (cost of acquisition = cost to the previous owner, with indexation benefits).
• USA: Federal estate tax applies to worldwide assets of US residents/citizens. The exemption threshold is approximately $13.6 million (2026), but this is set to halve after 2025 sunset provisions.
• UK: Inheritance tax at 40% on estates above £325,000 for UK domiciled individuals.
• UAE/Gulf: No inheritance tax, but without a will, Shariat law may apply to Muslim residents' assets by default in many Gulf countries.

Step 5: Appoint Guardians and Trustees

If you have minor children, your will should address:

• Guardianship: Designate a guardian for minor children in both jurisdictions.
• Testamentary trust: Consider setting up a trust for minor children's inherited property in Kerala to prevent mismanagement.

Common Mistakes to Avoid

1. Generic revocation clause — Ensure your wills do not inadvertently revoke each other.
2. Ignoring personal law — Your religion determines which Indian succession law applies. Do not assume one-size-fits-all.
3. No registered will in India — While registration is optional, an unregistered will is easier to contest.
4. Outdated nominee vs. heir confusion — A bank nomination does not override a will. The nominee is merely a custodian; the legal heirs are the rightful owners.
5. No FEMA planning — If heirs are also NRIs, they need to comply with FEMA for inherited property.

The Role of Probate in Kerala

Probate is the court process of proving a will's validity. In Kerala:

• Mandatory for Christians under the Indian Succession Act.
• Optional but advisable for Hindus — more banks and registrars are insisting on probate or a succession certificate.
• Process: File a petition in the District Court, publish notice in newspapers, allow 7-day objection period, court grants probate after verification.
• Timeline: 3-12 months depending on whether there are objections.
• Court fee: Ad valorem, based on the value of the estate.

Conclusion

Estate planning for NRIs is not about preparing for the worst — it is about ensuring that your family does not face legal chaos across two countries when they are already grieving. A pair of well-drafted, coordinated wills can save years of litigation and significant tax exposure.

Ready to secure your family's future? Book a consultation to create a legally sound estate plan covering your Kerala and overseas assets.

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Disclaimer: Succession and tax laws vary significantly across jurisdictions and personal law. This article is for informational purposes only. Consult with qualified legal and tax advisors in both India and your country of residence for personalized advice.