With rapid wealth creation, global exposure and maturing business outlooks, founders are no longer just building companies\u2014they’re thinking legacy. Trusts and estate structures are gaining traction as tools for smart succession planning, asset protection, and futureproofing against tax and legal uncertainties.<\/p>\n
New-age entrepreneurs who want more control, clarity and continuity in how their wealth lives on are adopting what used to be a playbook for old-money families.<\/p>\n
Founders are now thinking beyond just growth. They\u2019re asking: How do I preserve this? How do I pass it on smoothly? It\u2019s about protecting what they\u2019ve built from family disputes, future uncertainty and business risks.<\/p>\n
The conversation around trusts resurfaced recently following Indian cricketer and investor in lifestyle brand CheQmate Yuzvendra Chahal\u2019s separation from his wife. Anshuman Singh, a Supreme Court advocate, said Chahal\u2019s pre-established family trust helped shield key assets from legal exposure. As part of the settlement, Chahal reportedly agreed to pay \u20b94.75 crore in alimony.<\/p>\n
The surge in startup valuations, initial public offerings and high-profile exits has created a wave of newly accumulated wealth, Singh explained. Zerodha\u2019s Nithin Kamath has publicly stressed the importance of long-term wealth planning, even if the details of his trust arrangements aren\u2019t public.<\/p>\n
\u201cIt is not just the Yuzvendra Chahal case,” said Prachi Shrivastava, founder of Vakil Vetted. \u201cWe have seen a D2C founder creating a trust after a high-profile family feud played out over LinkedIn and a SaaS founder ringfencing shares after a breakup with a co-founder-turned-partner.”<\/p>\n
Peace of mind<\/strong><\/p>\n She said startups are no longer side hustles, they are generational assets. Equity, intellectual property, brand deals and stock options don\u2019t sit neatly in a locker \u2014 and founders are realising that personal life turbulence can leak into their cap tables if left unstructured, she remarked.<\/p>\n A major driver is the desire among startup and IPO-bound founders to sidestep potential family disputes\u2014whether it’s internal tensions, separations or anything that might complicate the transfer of wealth, explained Neha Pathak, head of trust & estate planning at Motilal Oswal Private Wealth. \u201cThe aim is to ensure a smooth handover and eliminate any friction before it arises.”<\/p>\n \u201cAnother big factor is risk,” she added. Startups, by nature, are high-stakes ventures and founders are increasingly making sure that if something goes wrong in the business, their personal assets remain protected. Trust and estate planning gives them that crucial separation\u2014and peace of mind.<\/p>\n The real question is: How does trust and estate planning actually work behind the scenes to protect wealth? How does it shield founders from risks, and what mechanisms make it effective? More importantly, how is it all structured to ensure both control and continuity?<\/p>\n Unlike wills, which become public, trusts offer a discreet way to distribute wealth.<\/p>\n In India, the key difference between a will and a trust is when they take effect and how much control they offer. A will comes into play only after death and goes through probate \u2013 a legal procedure through which assets are passed on \u2013 in some states, which is a public and sometimes lengthy legal process.<\/p>\n A trust, however, can be set up during one\u2019s lifetime, offers greater control over asset distribution, helps avoid probate, and keeps things private. Trusts are especially useful for complex estates or when discretion and long-term planning are priorities.<\/p>\n Another big reason to protect your estate, says Vishal Yeole, senior director \u2013 business advisory at Waterfield Advisors, is to stay one step ahead of any possible changes in estate tax laws.<\/p>\n India introduced Estate Duty in 1953 to tax inherited wealth, but it was scrapped in 1985 due to low revenue and enforcement challenges. Since then, there\u2019s been no estate or inheritance tax in the country, though the idea of reintroducing it resurfaces from time to time in policy circles.<\/p>\n Advantage of protection<\/strong><\/p>\n Explaining how trust structures help founders balance control and ownership, Yeole said the founder\u2019s stake can be moved into a trust, with the founder becoming a trustee. So, while they no longer \u201cown” the shares on paper, they still have a say.<\/p>\n Meanwhile, another key advantage, Yeole pointed out, is that trust assets are generally protected, unless it is proven that the transfer was fraudulent or done purely to dodge legal claims.<\/p>\n Often, the biggest concerns come from within the family. Founders do not want their hard-earned wealth caught up in internal disputes, especially during events like separation or divorce.<\/p>\n Startup founders often overlook trust planning\u2014until personal drama hits the cap table. Rippling co-founder Prasanna Sankar went public on X during a custody battle, raising alarms about control and stability. At Mu Sigma, Dhiraj Rajaram bought out ex-wife Ambiga\u2019s stake post-divorce, avoiding chaos but skipping a trust structure.<\/p>\n ShopClues’ Sandeep Aggarwal accused his cofounder wife Radhika of ousting him, igniting a public clash over credit and control. And at Zoho, founder Sridhar Vembu was accused by his wife of quietly shifting company assets to family, triggering questions around ownership and transparency.<\/p>\n Whether due to divorce, disputes over control, or succession challenges, the absence of structured trust planning can leave even the most successful startups vulnerable.<\/p>\n \u201cMany founders prefer setting up a private trust structure,” Pathak explained. \u201cWhy? Because it is intimate, controlled and allows them to ringfence assets from both external threats and internal complications. The trust deed can include specific provisions on who takes over the business, who has access to assets if something happens to the founder and how ownership gets passed on.”<\/p>\n One common approach is naming children as beneficiaries, while intentionally leaving out children\u2019s spouses. This helps avoid claims during potential divorces or disputes and keeps wealth secure within the bloodline.<\/p>\n Disruptive wealth<\/strong><\/p>\n One can even outline decision rights, voting rights and distribution conditions\u2014all tailored to the founder\u2019s vision.<\/p>\n Pathak shared the example of a garment manufacturing startup gearing up for an IPO. To manage the incoming wealth, the founders set up multiple trusts\u2014some offering immediate payouts to family members, others designed for staggered distributions, and a few structured specifically to repay principal lenders.<\/p>\n The idea was simple: ensure responsible use of funds and avoid overwhelming family members with sudden windfalls.<\/p>\n \u201cYou don\u2019t want new wealth to disrupt lives or breed complacency,” Pathak said.<\/p>\n One founder had two clear goals: securing lifelong care for their special needs child and supporting charities they were closely involved with. They wanted these plans to continue seamlessly, even if they weren\u2019t around. But there was another key concern: privacy.<\/p>\n \u201cI don\u2019t want the world knowing what I own or who\u2019s getting what,” the founder said. So, a significant portion of their estate was moved into trusts\u2014ensuring care, contribution, and complete confidentiality.<\/p>\n Tushar Kumar, a Supreme Court advocate, said the drafting of the trust deed must be precise, robust and tailored, clearly demarcating trustee powers, beneficiary entitlements and contingencies.<\/p>\n \u201cJurisdictional laws relating to stamp duty and registration must be accounted for, especially in respect of immovable property, to avoid inadvertent tax liabilities,” Kumar said.<\/p>\n Perhaps most importantly, care must be taken to ensure the trust does not conflict with the governing personal law of the family, particularly in matters involving intestate succession or claims under the Hindu Succession Act or Muslim Personal Law, he explained.<\/p>\n Sonali Pradhan, head of wealth planning at Julius Baer India, pointed out a critical but often overlooked angle\u2014founders can face claims not just from investors or regulators, but also from employees or even consumers. If there is any deficiency in compliance from the founder, the first move by regulators or courts is often to freeze their bank and demat accounts. For a listed company, that is not just a personal hit\u2014it can send serious shockwaves to the shareholders and other stakeholders.<\/p>\n Sudden death<\/strong><\/p>\n She also touched on how the rise in sudden untimely deaths has made many startup founders rethink the timing of the legacy planning exercise. She shared the example of a young, unmarried e-commerce founder who has seen rapid wealth creation.<\/p>\n His concern? Making sure there is a clear, thoughtful plan to manage and deploy that wealth even after he is gone.<\/p>\n Epigamia\u2019s co-founder Rohan Mirchandani died unexpectedly in December from a heart attack. In August 2023, 51-year-old Ambareesh Murty, co-founder of online furniture platform Pepperfry, succumbed to a heart attack.<\/p>\n In December 2021, Pankhuri Shrivastava, the 32-year-old founder of rental startup Grabhouse and woman-focused platform Pankhuri, lost her life to a cardiac arrest.<\/p>\n These incidents have prompted many young entrepreneurs to think seriously about legacy planning and protecting their wealth.<\/p>\n","protected":false},"excerpt":{"rendered":"With rapid wealth creation, global exposure and maturing business outlooks, founders are no longer just building companies\u2014they’re thinking…\n","protected":false},"author":2,"featured_media":40889,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[23232,51,5650,474,23233,2499,23230,4409,23231,16,15],"class_list":{"0":"post-40888","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-assets","9":"tag-business","10":"tag-estate-planning","11":"tag-finance","12":"tag-legacy-planning","13":"tag-personal-finance","14":"tag-startup-founders","15":"tag-succession","16":"tag-trusts","17":"tag-uk","18":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114381265533606646","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/40888","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=40888"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/40888\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/40889"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=40888"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=40888"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=40888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}