Estate planning across India and the US: wills, Power of Attorney, and what happens to your 401k
Returning NRIs hold assets in two countries under two legal systems. Here's how Indian and US wills interact, why you need separate POAs, and what happens to your 401k if you die as an Indian resident.
Shivang BadayaCo-Founder & Chief Executive Officer, RoviaReturning NRIs who lived in the US for a decade or more typically have assets in two countries, governed by two legal systems, with family members in both. Without deliberate estate planning, the outcome on death can be: Indian assets stuck in probate for years, US assets unclaimed or delayed because the heirs don't know the process, and tax complications in both jurisdictions.
Here's what you need to have in place.
The two-jurisdiction problem
Indian succession law (Indian Succession Act, 1925 for most communities; personal laws for others) governs Indian assets. US law — federal for retirement accounts, state law for other assets — governs US assets.
An Indian will is not automatically enforceable in the US. A US will is not automatically enforceable in India. If you die with only one will, your heirs face:
- An Indian probate court for Indian assets (which can take 1–5 years even with a valid will)
- A US probate court or estate administration process for US assets (3 months to 2 years, depending on state and asset complexity)
- Simultaneous proceedings in two countries under two legal systems
The solution is not more complex — it's structuring assets correctly so that most of them don't need wills at all.
Indian assets: nomination vs will
For most Indian financial assets, nomination is the most efficient mechanism — faster and cheaper than probate.
| Asset type | Nomination available? | Nomination effect |
|---|---|---|
| Bank savings/FD accounts | Yes | Nominated person receives funds directly |
| Demat account (stocks/ETFs) | Yes | Shares transferred directly |
| Mutual funds | Yes | Units redeemed/transferred directly |
| PPF | Yes | Balance transferred directly |
| EPF | Yes (and mandatory) | Balance paid to nominee |
| Insurance policies | Yes | Claim paid to nominee |
| Property (immovable) | No | Will + probate or succession certificate required |
| Jointly held assets | Depends on joint holding type | Survivorship or succession |
Key point: nomination is not inheritance — it is a convenience mechanism for financial institutions to transfer assets without waiting for probate. The nominee receives the asset but the legal heir can still challenge the transfer. In practice, for most families, the nominee IS the legal heir, so disputes are rare.
Action items for Indian assets:
- Add nominations on all bank accounts
- Add nominations on demat account (CDSL/NSDL portal)
- Update nominations on mutual fund folios (each AMC separately — or via Karvy/CAMS if consolidated)
- Verify PPF nomination (bank branch)
- Verify EPF nomination (EPFO member portal)
- Make a will for property and any asset without nomination
Making an Indian will
Requirements for a valid will under Indian Succession Act:
- Must be in writing
- Signed by the testator (the person making the will)
- Witnessed by two witnesses who are present at the time of signing and who also sign
- Testator must be of sound mind and age (18+)
Registration: not mandatory but strongly recommended. Registered wills are harder to challenge and cannot be misplaced. Registration fee is typically ₹500–2,000 at the sub-registrar's office. Bring original will, two witnesses, identity proof.
What to include in an Indian will:
- All immovable property (address, survey number, share if jointly owned)
- Residual estate clause ("all other assets not specifically mentioned above")
- Executor appointment (the person who will carry out the will's instructions)
- Guardian appointment for minor children (if applicable)
- Specific bequests for jewellery, heirlooms, artwork
Where to store: give one original to your executor, one to a trusted family member, scan and store securely in cloud (Google Drive, iCloud) with access instructions.
US assets: beneficiary designations over wills
For US financial accounts, beneficiary designations are far more important than wills. They override will provisions entirely.
Update beneficiary designations on:
| Account | Where to update | Notes |
|---|---|---|
| 401k | Your former employer's plan portal or HR | Primary + contingent beneficiary; update after any life event |
| Traditional IRA | Fidelity/Schwab/IBKR — account settings | Critical — verify it was updated after marriage, divorce, new children |
| Roth IRA | Same as above | Same criticality |
| US brokerage (taxable) | Account settings → beneficiary/TOD | TOD = Transfer on Death; adds beneficiary without probate |
| US bank accounts | Bank branch or online portal → POD | POD = Payable on Death; equivalent of TOD for bank accounts |
POD and TOD designations on US accounts mean those accounts pass directly to the named beneficiary without probate, regardless of what your will says.
What happens to a 401k with an Indian resident as beneficiary:
If your spouse (or adult child) is an Indian resident and you name them as 401k beneficiary:
- On your death, the plan administrator is notified
- Your beneficiary must contact the US plan administrator and file a claim
- They will need: your death certificate (translated into English if needed), their own identity proof, tax identification details
- For a spouse beneficiary: eligible to roll into an Inherited IRA (favorable tax treatment)
- For a non-spouse beneficiary (child, sibling): must take distributions within 10 years under current US rules
The process can be managed from India — all major US plan administrators handle international beneficiary claims. It typically takes 3–6 months for the initial claim; distributions then continue from the US.
Tax on 401k distributions received by Indian beneficiaries:
- US: taxable as ordinary income in the US (withholding applies)
- India: once you are ROR, distributions received as beneficiary are income in India; DTAA credit for US taxes paid
- Form 67 in India to claim the DTAA credit
Power of Attorney: Indian and US
Indian POA
When you need it:
- You want to sell or buy Indian property but will be out of India at the time of registration
- You want someone to manage Indian bank accounts on your behalf if incapacitated
- You want to grant a family member authority to manage your Indian financial affairs
Types:
- General Power of Attorney (GPA): broad authority to act on your behalf for all purposes — dangerous to give to anyone except a very trusted family member
- Specific Power of Attorney (SPA): limited to a defined transaction ("execute the sale deed for [property address] in my favour at a price of ₹X")
Registration: a POA used for immovable property transactions in India must be registered at the sub-registrar's office to be effective. A POA executed abroad (including in the US) must be notarised and apostilled (under the Hague Apostille Convention) before use in India.
If you need a POA while still in the US: have it notarised by a US notary, then get an apostille from the Secretary of State of the state where the notary is commissioned. Then it can be used directly in India for registered transactions.
US POA (Durable Power of Attorney)
When you need it: if you become incapacitated, someone in the US (or India with US authority) must manage your US accounts. A Durable Power of Attorney (DPOA) survives incapacity.
Who to appoint: a US person (US citizen or resident) is simplest for bank and brokerage purposes — most US financial institutions are more comfortable dealing with a US-based attorney-in-fact. A trusted family member in the US, or a US attorney.
What it covers: banking, brokerage, real estate, contracts — anything you specify.
Healthcare decisions: a separate document — Healthcare Power of Attorney or Healthcare Proxy — covers medical decisions if you are incapacitated. As someone who has returned to India, this may have less relevance unless you spend significant time in the US.
The returning NRI estate planning checklist
India:
- Make a registered Indian will covering property and all non-nominated assets
- Add/update nominations on all bank accounts, demat, mutual funds, PPF, EPF
- Grant Specific Power of Attorney for any property transactions where you may not be present
- Name executor in will; inform executor of the will's location
US:
- Verify 401k beneficiary designation (log into plan portal)
- Verify IRA beneficiary designation (all IRA custodians)
- Add TOD (Transfer on Death) on US brokerage accounts
- Add POD (Payable on Death) on US bank accounts
- Consider a US Durable Power of Attorney for a trusted US person
- Store US account details (institution, account number, login recovery info) in a secure location your heirs can access
Related: Section 89A and your 401k/IRA after returning to India · Schedule FA: disclosing your foreign assets in your Indian ITR · The returning NRI master guide
Frequently asked questions
- Does an Indian will cover my US assets (401k, brokerage, bank accounts)? ▾
- Generally no — not directly. An Indian will is a legal document under Indian law (Indian Succession Act or the personal law applicable to you). For it to have legal effect on US assets, it typically needs to be probated in the US jurisdiction where the assets are held. This is a lengthy and expensive process. The practical solution: maintain a separate US will (or more efficiently, use beneficiary designations on all US financial accounts — 401k, IRA, brokerage). Beneficiary designations on US accounts supersede will provisions and pass assets directly to the named beneficiary without probate.
- Should I make a new Indian will after returning to India? ▾
- Yes — if you don't have one, make one. Your Indian will should cover all Indian assets: property, bank accounts, mutual fund holdings, EPF, PPF, demat accounts, jewellery, and any other Indian movable or immovable property. Even if you have nominations on bank accounts and demat, a will is essential for assets where nominations don't apply (property, jointly held assets, business interests). Make the will, register it with the sub-registrar's office (registration is not mandatory but strongly recommended — it reduces future challenges), and store copies safely.
- What happens to my 401k if I die as an Indian resident? ▾
- Your 401k beneficiary designation controls who receives it, not your will. If you named your spouse as primary beneficiary and a child as contingent beneficiary during your US working years — that designation remains in effect. Your spouse can roll the 401k into an Inherited IRA and take distributions. As an Indian resident, the beneficiary designation works the same way — it's a US account under US law. The complication: your Indian heirs may need to navigate US probate or US financial institution requirements to claim the funds, which requires a US attorney and can take 6–18 months.
- What is a Power of Attorney and why does a returning NRI need one for India? ▾
- A Power of Attorney (POA) authorises another person to act on your behalf for specific or general purposes. Returning NRIs need POA for: managing Indian property transactions remotely if they travel, managing accounts or assets on behalf of elderly parents (if the parent grants POA to you), executing property sale or purchase if you can't be physically present. A general POA covers all acts; a specific POA covers a defined transaction (e.g., 'sell property at X address'). POAs used for Indian property transactions must typically be registered and notarised to be effective.
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About the author
Co-Founder & Chief Executive Officer, Rovia
CFA charterholder with 10+ years across hedge funds and NRI fintech. Covers RSU taxation, equity comp, and cross-border investing for Indian residents. Ex-JP Morgan, Makrana Capital, Zolve.
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