A guide for NRIs in the United States with assets in India — covering US Federal Estate Tax implications, the TCJA exemption sunset after December 2025, Indian succession law, US probate vs Indian proceedings, and how to coordinate US and Indian estate plans effectively.
Quick Summary
US-resident NRIs with assets in both the USA and India face two separate legal systems on succession. Indian assets — property in Kerala, bank accounts, fixed deposits, shares — are governed entirely by Indian succession law regardless of US residence or citizenship. A succession certificate from the Indian District Court is required to release Indian financial assets; Indian property passes under the applicable Indian personal law. US assets are governed by US federal and state law. US-citizen NRIs face a significant estate planning issue: the Federal Estate Tax exemption of $13.61 million per individual (as of 2024) is scheduled to halve after 31 December 2025 under the TCJA sunset provision — a change with material implications for NRIs with substantial Indian property.
A US Will does not automatically govern Indian property — separate Indian succession proceedings are always required for Indian assets. A separate Indian Will covering Indian assets, together with updated nominations on all Indian financial accounts, provides the most efficient estate administration framework for US-based NRIs with India assets.
Key references: Indian Succession Act, 1925 · Hindu Succession Act, 1956 · eCourts India · Kerala Registration Dept · Last reviewed: June 2026
US Federal Estate Tax (FDET) applies to the worldwide assets of US citizens and US domiciliaries at the time of death. For US-citizen NRIs, this includes Indian property — land, buildings, and financial assets in India are all counted towards the taxable estate.
As of 2024, the FDET exemption was $13.61 million per individual (indexed for inflation). Under the Tax Cuts and Jobs Act 2017 (TCJA), this elevated exemption is legislatively scheduled to sunset on 31 December 2025, reverting to approximately $7 million (indexed). The FDET rate on amounts above the exemption is 40%.
The implications for US-citizen NRIs with ancestral or acquired property in Kerala are significant. A US-citizen NRI who owns a family home in Kerala, financial investments in India, and US assets may find that the combined value crosses the post-sunset threshold — resulting in a 40% estate tax on amounts above the exemption. Gifting strategies, trust structures, and lifetime transfers are the primary tools to address this exposure, but all require legal advice well in advance of death.
Non-citizen NRIs who are US domiciliaries (green card holders and long-term residents treated as domiciled in the US) face a much more severe position: the FDET exemption for non-citizen non-resident aliens is only $60,000, making estate tax exposure extremely high for any NRI in this category with significant worldwide assets.
Indian assets of a deceased US-based NRI are governed entirely by Indian succession law, completely independently of any US proceedings. The governing law depends on religion:
Hindu, Sikh, Buddhist, or Jain NRIs: The Hindu Succession Act, 1956 governs intestate succession. Class I heirs — spouse, children, and mother — take simultaneously in equal shares. The Supreme Court in Vineeta Sharma v. Rakesh Sharma (2020) confirmed daughters have equal coparcenary rights in ancestral property with retrospective effect.
Christian NRIs: The Indian Succession Act, 1925 governs both testamentary and intestate succession. On intestacy, one-third passes to the spouse and two-thirds to lineal descendants.
Bank accounts, fixed deposits, shares, and mutual funds in India require a valid nomination claim or a succession certificate from the Indian District Court. The nomination route is significantly faster and should be prioritised — all Indian financial accounts and investments should carry updated, valid nominations.
Kerala property passes under the applicable personal law on intestacy, or under the Will if one exists and is properly registered. The Sub-Registrar's office records the transfer; mutation at the Village Office follows to update revenue records.
US probate proceedings — whether in the form of a Revocable Living Trust administration, a testate probate, or an intestate administration — do not automatically extend to Indian assets. A US Grant of Probate or a US court order, even if broadly worded to cover worldwide assets, does not by itself authorise dealing with Indian property. Indian financial institutions and the Sub-Registrar will require Indian legal documentation — a succession certificate, letters of administration, or a court-ordered transmission — before releasing Indian assets or registering property transfers.
This means that even where a US-based NRI has a comprehensive US estate plan — a Revocable Living Trust, a US Will, beneficiary designations — a separate Indian legal process is required for Indian assets. The most effective way to minimise the Indian side of the process is:
For US-based Malayali NRIs with assets in both countries, the following approach provides the most efficient estate administration:
Both Wills should be drafted with awareness of the other. The US Will should state it applies to assets outside India (or specifically to US assets); the Indian Will should state it applies only to assets situated in India. Each should contain a non-revocation clause confirming it does not revoke the other. This prevents the later-executed Will from being construed as revoking the earlier one — a common drafting error with serious consequences.
US Federal Estate Tax applies to worldwide assets of US citizens and US domiciliaries. For US-citizen NRIs, Indian property is included in the taxable estate. The exemption was $13.61 million per individual as of 2024, but is scheduled to halve after 31 December 2025 under the TCJA sunset provision. Non-citizen NRIs who are US domiciliaries face a much lower $60,000 exemption.
No. US probate proceedings do not automatically extend to Indian assets. Indian immovable property and financial assets require separate Indian proceedings — a succession certificate from the Indian District Court for financial assets, and title transfer through the Will or intestate succession for immovable property. A US Will or Grant of Probate does not by itself authorise dealing with Indian property.
A US Will may be recognised for Indian immovable property if it complies with Indian Succession Act formalities for Wills executed outside India. However, a separate Indian Will specifically covering Indian assets is the safest approach — it reduces complexity, cost, and the risk of probate disputes. The Indian Will should contain a non-revocation clause confirming it does not cancel the US Will.
No. A US Revocable Living Trust does not govern Indian assets. Indian property must be dealt with under Indian law. The existence of a US trust does not simplify or replace Indian succession proceedings. A separate Indian Will or Indian trust arrangement is needed for Indian assets.
Updated nominations on all Indian financial accounts allow direct nominee claims without a succession certificate. A registered Indian Will covering Indian assets simplifies property transfer and reduces the risk of challenge. These two steps — updated nominations and a registered Indian Will — provide the most efficient estate administration framework for US-based NRIs with India assets.
The office advises on Indian Will drafting, succession certificates, property transfer, and the interaction between US and Indian succession law. All matters managed remotely.
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