India is creating wealth faster than ever. But preserving that wealth across generations remains far less certain. Global studies show that nearly 70% of wealthy families lose a significant portion of their wealth by the second generation, and that number rises to 90% by the third. The reasons are rarely market-related. More often, they stem from something simpler: a lack of documentation, planning and family governance.
That challenge is the focus of the second episode of The Future of Private Wealth: Conversations on Lasting Legacies, presented by FundsIndia Private Wealth, and powered by CNBC-TV18. In this episode, host Mridu Bhandari speaks with Srinivas Mendu, CEO of FundsIndia Private Wealth, and Nikhil Mudbhatkal, Senior Vice President for Estate and Succession Planning at FundsIndia Private Wealth, about why wealth continuity planning is becoming essential for Indian families.
Why Wealth Often Disappears Across Generations
One of the most widely cited challenges in family wealth is how quickly it can dissipate. "Almost 70% of wealthy families lose significant wealth when it passes to the second generation," Nikhil Mudbhatkal said. "That number increases to nearly 90% by the third generation." The causes are rarely investment failures. Instead, they often lie in the absence of clear succession structures.
In India, the consequences of poor documentation are visible in an unexpected place: unclaimed assets. According to various estimates, unclaimed financial assets in India today are close to ₹2 lakh crore. In many cases, family members are simply unaware that these assets exist. "That itself shows the importance of basic planning," Nikhil Mudbhatkal said. "At the very least, families should maintain an asset register and ensure that members know where assets are held."
The reasons are often cultural as much as financial. Discussions around succession frequently involve uncomfortable topics such as mortality, inheritance and family dynamics. "We are not accustomed to thinking about death," Srinivas Mendu noted.
Yet avoiding the conversation does not eliminate the risk. In the absence of a documented plan, succession laws determine how assets are distributed. "If you don't decide, the law will decide for you," Nikhil Mudbhatkal said. That process may not reflect the intentions of the wealth creator and can sometimes trigger disputes among family members.
Professional advice also becomes important at this stage, particularly when families hold multiple asset types or operate businesses. "A will has to be executed correctly," he said. "The terminology, witnesses and structure all matter." Mistakes in these areas can create complications later, especially if legal verification is required.
Governance determines how assets are managed and transferred over time - including when beneficiaries receive access and under what circumstances. For example, some families design trust structures where beneficiaries receive income gradually rather than gaining immediate control over the entire asset base. Such frameworks are designed to preserve long-term family wealth while balancing flexibility and oversight.
Without clear governance, however, even well-designed structures can create new conflicts or inefficiencies.
Different countries have different taxation and inheritance frameworks, which means that succession planning must account for cross-border legal implications. In some cases, families may need to combine Indian estate structures with overseas tax advice to ensure that assets transition smoothly. The objective, as Srinivas Mendu said, is to bring all assets into a coherent framework so families have clarity on how wealth will transfer across generations.
Entrepreneurs, however, face an additional question: the future of the business itself. Business-owning families frequently consider structures that allow ownership to remain within the family even as leadership changes. In some cases, this may involve holding shares through a family trust so that major ownership decisions are governed collectively rather than by individual heirs. Such arrangements can help preserve the legacy of a business across multiple generations.
"Ask yourself one simple question," Srinivas Mendu said. "Do I have a basic will in place?" He compares the need for succession planning today with the evolution of banking practices. Decades ago, nomination requirements were not common. Today, they are standard. But nomination alone, he argues, is not enough. "A will adds another layer of protection."
Nikhil Mudbhatkal agrees that communication within families is just as important as documentation. "Have a clear discussion with your family about your thought process," he said. "Documentation comes later." Without that conversation, succession plans can create confusion or conflict when the time comes to execute them.
Whether someone is a founder preparing for leadership succession, a professional with global investments or part of a multi-generational business family, early planning can make the difference between continuity and fragmentation.
The pages slugged ‘Brand Connect’ are equivalent to advertisements and are not written and produced by Forbes India journalists.
First Published: Mar 31, 2026, 19:09
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