Private family trusts, on the other hand, offer a uniquely flexible, low‑compliance, and tax‑efficient framework that aligns naturally with the needs of Indian families—especially those with multi‑generational aspirations.

Below is a deeper look at how each structure performs across the key dimensions that matter most to families.

1. Management & Governance: Freedom vs Formality

Private Trusts
A private trust is governed by its trust deed, not by rigid statutory rules. Families can design governance structures that reflect their values—appointing trustees, defining succession, creating protector roles, and setting clear distribution mechanisms. There are no mandatory minimum or maximum number of trustees, board meetings, resolutions, or public disclosures. Governance is principle‑based, personalised, and private.

Companies & LLPs
Companies must comply with the Companies Act, 2013, and LLPs with the LLP Act, 2008. Both require formal meetings, filings, registers, audits, and event‑based compliances. Governance is rule‑bound, not family‑centric. Even passive wealth‑holding attracts corporate formalities.

2. Customisation of Objectives: Trusts Lead by a Wide Margin

Private Trusts
Trusts allow families to articulate highly customised objectives—maintenance, education, healthcare, lifestyle support, special‑needs planning, asset protection, or long‑term wealth preservation. The trust deed can define nuanced rules for distributions, contingencies, and family governance. No other structure offers this level of tailored intent.

Companies & LLPs
Both are fundamentally commercial vehicles. Their objects must align with business or profit‑oriented activities. Using them for family governance or passive wealth‑holding often creates legal and tax inefficiencies.

4. Ease of Winding Up: Simple vs Procedural

Private Trusts
A trust can be wound up by fulfilling its objectives, distributing remaining assets, and executing a dissolution deed. No regulatory approvals. No complex procedures. This simplicity is invaluable for families.

Companies & LLPs
Winding up requires formal processes, filings, creditor notices, audits, and approvals. It is time‑consuming and expensive.

5. Tax Efficiency: Trusts Offer the Cleanest Path

Private Trusts
Trusts provide tax‑efficient pathways for settling corpus and distributing income or capital.

• Corpus contributions are not taxable.
• Income can be taxed in the hands of beneficiaries or the trust, depending on structure.
• No dividend distribution tax.
• No double taxation.
• Capital distributions are generally tax‑neutral.

This makes trusts the most efficient vehicle for long‑term wealth preservation.

Companies & LLPs
Companies face double taxation; LLPs avoid dividend tax but still create tax events on certain distributions. Neither offers the clean, friction‑free tax treatment that trusts provide.

The PlanMyEstate View

For families focused on continuity, protection of wealth, privacy, and smooth inter‑generational transition, private trusts stand in a class of their own. Their flexibility, customisation, low compliance burden, and tax efficiency make them the preferred vehicle for modern estate planning.

At PlanMyEstate, we help families design highly customised trust structures that reflect their values, protect their legacy, and ensure seamless succession—today and for generations to come. Most importantly, we take great pains to build governance frameworks that ensure trustees remain accountable and beneficiaries remain empowered, so the structure always serves the family’s best interests.