A Boundary That Looks Clear Until It Isn't
Succession and estate planning — wills, trusts, family settlements, HUF partitions, nomination structuring — is unambiguously CA and CS territory. None of it requires SEBI Investment Adviser registration on its own. But succession planning engagements rarely stay purely structural. A family asks the CA drafting their will: "Given what we're leaving to each child, should we rebalance the portfolio before the transfer, or keep it as-is?" That single follow-up question, if answered with a specific recommendation, is where the engagement quietly crosses from estate structuring into investment advice — and it happens inside succession planning engagements more often than most CA firms realise.
What Stays Purely in the CA/CS Domain
The following activities do not trigger IA registration, however investment-adjacent they may feel:
- Drafting wills, trust deeds, and family settlement agreements — legal and tax structuring, not investment recommendation
- HUF partition and reconstitution advice — a tax and legal exercise
- Nomination and transmission documentation for demat accounts, mutual fund folios, and AIF units — procedural, not advisory
- Tax computation on transfer — capital gains implications of a transfer the family has already decided to make
- Explaining the succession-relevant mechanics of an existing holding — for example, describing how an AIF's lock-in interacts with a nomination, without recommending whether to hold or exit the fund
What Crosses Into Regulated Investment Advice
The line is crossed when the succession conversation produces a specific recommendation on what to buy, sell, or hold, for consideration:
- "You should liquidate this portfolio before transferring it and re-invest the proceeds in X" — this is investment advice wrapped inside a succession conversation
- Recommending a change in asset allocation "to make the estate easier to divide" — the succession rationale doesn't change the fact that a security-level recommendation was made
- Advising on which specific AIF or fund each heir should be allocated, as opposed to simply documenting an allocation the family has already decided — the former is advisory, the latter is administrative
- Ongoing "estate portfolio review" retainers that, in substance, function as periodic investment advice delivered under an estate-planning label
Why This Matters More for AIF-Heavy Estates
We see this boundary tested most often in estates that include AIF, PMS, or concentrated listed-equity holdings — because succession planning for illiquid or lock-in-bound assets naturally invites the question of whether to restructure before transfer. A CA advising a family through a Category II AIF-heavy estate, for instance, may be asked to weigh in on whether units should be transferred as-is, redeemed at the next liquidity window, or held to maturity — and answering that question substantively, for a fee, is advisory activity, not succession documentation, however the engagement letter describes it.
Structuring Succession Engagements Correctly
The cleanest approach we recommend to CA and CS firms handling succession and estate work is:
Scope the engagement letter tightly — explicitly state that the mandate covers legal/tax structuring and documentation, and that any investment recommendation on existing holdings falls outside scope and will be referred to a registered IA (in-house or external).
Document family-originated decisions — where the family decides, on its own, to hold, sell or reallocate before a transfer, record that the decision originated with the family and that the CA's role was limited to executing the tax and legal consequences.
Route recommendation-heavy conversations to a properly registered IA function — whether that's your own arms-length IA vertical or an external RIA relationship, rather than absorbing it informally into the succession engagement.
How We Help
Anuj Desai & Associates structures succession and estate planning engagements for CA and CS-led practices so the advisory boundary is documented from day one — not discovered during a dispute or a SEBI query. Our scope includes:
- Engagement letter and scope drafting that cleanly separates succession/tax work from any investment recommendation activity
- Trust and family settlement structuring, including for AIF, PMS and listed-portfolio-heavy estates
- IA registration support where a family's succession needs genuinely warrant an in-house advisory function
- Regulatory correspondence if a past engagement needs review or a SEBI query needs a response If your firm handles succession and estate planning for HNI or family-office clients, write to office@anujdesaiassociates.com or call +91 96194 56656 — we'll help you scope these engagements so the boundary holds up under scrutiny.