Family Office Formalisation: The Next Wealth Chapter

There is a particular kind of Indian office that never appears on an org chart. It sits behind an unmarked door, usually on the same floor as the promoter’s cabin, and it is run by a man who has been with the family for thirty years and knows where everything is — the property papers, the demat passwords, the loan a second cousin never repaid. He holds no title. He holds something better: trust.

That office is not disappearing because trust went out of fashion. It is disappearing because trust does not scale.

The money grew up first

India had roughly 45 family offices in 2018. By 2024 the count was close to 300, a near sevenfold jump in six years on PwC’s numbers. The Economic Times–1Lattice Indian Family Offices Report 2026 now puts the tally past 300, with combined assets above $30 billion. EY’s estimate is more conservative in rupee terms — about ₹70,000 crore under management in 2024, expected to grow roughly 1.5 times over three years at a 14 percent CAGR — but the direction is identical.

The pipeline behind that growth is larger still. India has around 200 billionaires holding close to $1 trillion, and more than 19,000 individuals with assets above $30 million. Families in that bracket are projected to rise from about 16,000 in 2025 to roughly 26,000 by 2030.

One number, though, does more work than all the others. Over the coming decade, an estimated $1.3 trillion to $1.5 trillion will pass from one Indian generation to the next. A portfolio can be run informally. A transfer of that size cannot.

Formalisation is a governance problem before it is a legal one

The Julius Baer–EY 2026 playbook, published in August, describes the shift with unusual bluntness: Indian family offices are moving from founder-centric, informal decision-making to structured, process-led frameworks. In practice that means family constitutions, investment committees, governance charters and councils, plus professional teams — a CIO who is not the founder’s nephew, a CFO who reports to a committee rather than a mood, and clearly defined rules on ownership, decision rights and reporting.

Part of the pressure is generational. More than half of Indian family offices now include millennial or Gen Z members in investment decisions, and roughly 30 percent of next-generation investors are pushing allocations towards health technology, fintech and artificial intelligence. The next generation tends to arrive with an MBA, a Bloomberg terminal and an uncomfortable question: what exactly is the process here?

“A family office without a constitution is just a chequebook with opinions. Formalisation is what converts a promoter’s instinct into an institution’s process — and, crucially, into something a court, a tax officer or a disgruntled cousin can be shown.”

The law moved, quietly, twice

Two changes in the last eight months have altered the plumbing under every Indian estate plan.

The first is the Repealing and Amending Act, 2025, which received presidential assent on 20 December 2025 and omitted Section 213 of the Indian Succession Act, 1925. For nearly a century, wills made by Hindu, Buddhist, Sikh and Jain testators within the original civil jurisdiction of the Bombay, Calcutta and Madras High Courts could not be acted upon without probate. That compulsion is gone. Probate has not been abolished — it has been demoted from mandatory gatekeeper to optional tool, to be used where the estate is contested or complex.

This is a genuine saving in time and legal fees. It also quietly raises the stakes on drafting. When a court is no longer the default checkpoint, the quality of the will, the clarity of the trust deed and the discipline of the documentation become the only defences a family has. Existing probates and pending cases are unaffected, and rights already accrued are saved.

The second change is the Income-tax Act, 2025, which came into force on 1 April 2026 and applies to income from FY 2026–27 onwards. It replaces the 1961 Act with 536 sections, cuts the rules from 511 to 333 and the forms from 399 to 190. The government has been consistent that the underlying tax policy is unchanged; this is a redrafting exercise, not a rate shock.

For family offices, though, the housekeeping is real. Trust deeds, family settlements, private placement memoranda and shareholder agreements drafted against 1961 section numbers now cite a statute that no longer exists. None of this is glamorous. All of it is the sort of thing that surfaces during a dispute or an assessment, at the worst possible moment.

SEBI is rebuilding the on-ramp

The regulator has spent the past year rewiring how sophisticated capital enters private markets, and family offices are the obvious beneficiary.

The SEBI (Alternative Investment Funds) Third Amendment Regulations, 2025, notified on 18 November 2025, created a distinct “Accredited Investors only fund” class and cut the minimum commitment in a Large Value Fund from ₹70 crore to ₹25 crore. Law firms noted the point plainly: the ₹70 crore threshold had kept perfectly sophisticated family offices out, and ₹25 crore brings them in. AI-only schemes also get relief from the standard PPM template, the annual PPM audit and the 1,000-investor cap, and accreditation now locks in at onboarding for the life of the scheme.

Separately, from September 2025, Category I and II AIFs can run dedicated co-investment vehicle schemes for accredited investors without the manager needing a separate portfolio-manager licence, with co-investment in any investee company capped at three times the investor’s contribution through the main fund. For a family office that wants concentrated exposure to one deal rather than a blind pool, that is a structural door opening.

The most consequential proposal is still live. On 13 August 2026, SEBI issued a consultation paper proposing securities market assets as a fresh route to accreditation — ₹5 crore for individuals, ₹20 crore for body corporates — alongside the existing income and net-worth tests. SEBI’s own estimate is that this single change could expand the eligible pool to around four lakh investors, against an existing AIF investor base of roughly one lakh. The paper also proposes manager-led accreditation valid at group level, a standard three-year validity, and treating all persons resident outside India as deemed accredited investors. Comments close on 3 September 2026.

Read together, these moves signal SEBI’s stated long-term intent: to shift from cheque size to accreditation status as the test of investor sophistication. For a family office, that makes the paperwork the passport.

GIFT City: a door open on one side

The Family Investment Fund is India’s purpose-built answer to Singapore’s variable capital company and Dubai’s foundations. Under the IFSCA (Fund Management) Regulations, 2025, a single family can run a self-managed FIF — open or closed-ended — with a minimum corpus of $10 million to be built within three years, a principal officer based in the IFSC, and permission to hold securities, LLP interests and physical assets including real estate, bullion and art. There is no per-investor minimum of the sort that applies to other schemes, and the FME net worth requirement is waived.

In April 2026, IFSCA granted the first FIF registration under the 2025 regulations to Poornam Asset Management IFSC, a firm with United Kingdom roots — nearly three years after the framework was first introduced.

Indian families are still waiting. The obstacle is a definitional one: whether money moving from India into a GIFT City FIF is overseas portfolio investment or overseas direct investment, and the fact that the two routes cannot run in parallel. Premji Invest and Catamaran Ventures applied in 2023; in-principle approval followed in January 2024; final registration remained pending into 2026. IFSCA’s then chairman K Rajaraman put it precisely — where the source of funds is overseas, no further clarification is needed, but where funds move out of India, the RBI and the government must take the call.

The friction is not merely theoretical. In March 2026, RBI guidance treated GIFT-IFSC entities as resident for Foreign Liabilities and Assets reporting, an awkward result given the IFSC’s offshore status under FEMA. On 1 July 2026 the RBI revised its FLA FAQs to move that reporting from the RBI to IFSCA, with IFSCA issuing a clarification the same day. The episode was resolved sensibly, but it illustrates the running theme: two regulators, one jurisdiction, and families holding structuring decisions in abeyance while it is settled.

What formalisation actually buys

Not, primarily, tax savings. The honest pitch is duller and more durable. Continuity, when the founder is no longer in the room. Auditability, when an officer asks why a decision was taken four years ago. Defensibility, when a family member with a sincerely different memory of the same conversation hires a lawyer.

It costs something. A real CIO is expensive. An investment committee empowered to say no to the founder is more expensive still, in ways that do not show up on an invoice. An independent trustee will occasionally be inconvenient. That inconvenience is the product, not a defect in it.

The next chapter

India is about to run the largest private wealth transfer in its history through a legal system that has just rewritten its income tax statute, relaxed its probate rule, redrawn the entry criteria for private markets, and is still negotiating with itself over what GIFT City actually is. The families that come through it well will not be the ones with the cleverest structure. They will be the ones whose structures were documented, governed and boring enough to survive a change of generation, a change of statute and a change of mind.

The man behind the unmarked door was never the problem. The problem was that everything he knew lived in one head, and heads do not file returns.

Sources

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