Global mobility has transformed the way families own, hold, and pass on wealth. Today, it is common for Indian families to have children settled abroad, foreign investments, overseas bank accounts, and real estate spread across multiple jurisdictions. Wealth created cross borders with toil and hard work may be lost due to procedural hurdles in inheritance and succession laws.

In this environment, inheritance is no longer merely a question of who receives a property or asset. It is equally a question of whether the beneficiary can effectively hold, manage, transfer, and ultimately enjoy that property.

One of the most common misconceptions is that a foreign citizen or nonresident Indian (NRI) or Overseas Citizens of India (OCIs) cannot inherit property in India. Indian law, however, takes a far more liberal approach. Subject to compliance with the Foreign Exchange Management Act, 1999 (FEMA), its Rules and Regulations and Reserve Bank of India (RBI) regulations, NRIs, OCIs, and even foreign citizens can inherit property situated in India.

The FEMA Perspective:

FEMA permits persons resident outside India to hold, own, transfer, or invest in property situated in India where such property was inherited from a person who was resident in India.

Importantly, inheritance enjoys a special status under FEMA. While there are restrictions on the purchase of certain categories of immovable property by NRIs and OCIs, inheritance is treated differently. For example, agricultural land, farmhouses, and plantation properties, that NRIs generally cannot purchase, may nevertheless be devolved upon them through inheritance.

The Other Side of the Equation

Cross-border succession issues are not limited to foreign beneficiaries inheriting property situated in India. Increasingly, resident Indians inherit overseas bank accounts, foreign securities, and real estate located outside India. FEMA permits a person resident outside India may continue to hold and deal with property situated in India, including currency, securities, and immovable property, where such property were inherited from a person resident in India.

This is a significant exception to the restrictions that would ordinarily apply to overseas investments or acquisitions by resident individuals. However, the subsequent handling of the properties, including the treatment of sale proceeds and foreign exchange, requires careful regulatory analysis.

Beyond Inheritance: Managing Property Across Borders

The challenges do not end with inheritance. Beneficiaries frequently assume that inherited property can be freely sold, transferred, repatriated, or retained in the jurisdiction where they are located. In practice, the position is often far more nuanced.

Where property situated in India are inherited by non-residents, FEMA prescribes specific rules governing the transfer of properties and the remittance of sale proceeds outside India. Depending on the nature of the property, remittances may be subject to prescribed limits, and prior RBI approvals amongst other requirements.

Similarly, where resident Indians inherit property situated overseas, the analysis often extends beyond inheritance itself. FEMA generally permits resident Indians to inherit and continue holding foreign property. However, practical considerations frequently arise regarding the administration of such properties, the treatment of sale proceeds, tax implications and compliance with the laws of the jurisdiction in which the properties are located. As a result, cross-border inheritance often requires navigating multiple legal and regulatory frameworks simultaneously.

The real lesson is simple, succession planning is no longer a purely domestic exercise. As families become increasingly global, estate planning must evolve
accordingly.

Beyond the Will: Modern Frameworks for Cross-Border Family Succession

A well-drafted Will remains the cornerstone of any succession plan, however, particularly where beneficiaries, properties, or family members are spread across multiple jurisdictions, other structures for estate planning must be introduced. In many cases, a single Will alone may not be sufficient. Families with properties across multiple jurisdictions often use structures such as concurrent Wills tailored to each jurisdiction, private family trusts, family arrangements, and family office frameworks to facilitate succession, preserve wealth, and provide long-term governance across generations.

These structures can help address concerns that often arise in cross-border situations, including continuity of management, protection of vulnerable beneficiaries, confidentiality, efficient property administration, and mitigation of succession disputes. At the same time, no single solution is universally appropriate.

The effectiveness of a Will, trust, family settlement, or family office structure will depend on numerous factors, including the location of the property, the residence of beneficiaries, tax implications, exchange control regulations, and the succession laws applicable in the relevant jurisdictions.

Cross-border estate planning therefore requires a holistic review of what is often an intricate web of succession, tax, trust, corporate, and foreign exchange laws operating across multiple countries.

A well-structured cross-border estate plan can help preserve wealth, minimise disputes, reduce regulatory hurdles, and ensure that properties pass smoothly to the next generation, regardless of where they reside.