Many clients use the last weeks of the year to put family paperwork in order. The bank deposits get a nominee, the demat account gets two, and the mutual fund folios are brought into line. None of those nominations reaches a holding in the US, which is why a will for foreign assets matters more than most clients assume. For a client in a private US real estate deal, that holding is usually shares in a US corporation, which the US treats as a US asset.
The advisor's task at this review is narrow and practical. The will must name the US holding, the heirs must be able to hold it under FEMA and report it, and the client must know the US estate tax question is separate. The guide to US commercial real estate for advisors explains how these deals are structured. The most recent official update on the subject is the IRS page on transfer certificates, revised on 5 May 2026, which asks for the will itself.
Why an Indian nomination does not reach a US holding
A nomination is an instruction to an Indian institution. A bank, a depository or a fund house records it and, on the holder's death, deals with the named person. Those rules do not extend to a corporation formed in the US, which keeps its own register of shareholders and has no record of the client's Indian nominations.
Even inside India, a nomination does not decide who inherits. In Shakti Yezdani v. Jayanand Jayant Salgaonkar, decided on 14 December 2023, the Supreme Court upheld the view that the law of succession supersedes a nomination under the Companies Act, 1956 and the Depositories Act, 1996. According to a summary by the law firm Argus Partners, the court held that legal heirs "would not be excluded" by a nomination. The nominee receives the asset and answers to those entitled under the will or succession law. For a US holding there is not even that partial route, so the will carries the whole weight.
What a will for foreign assets should say about US shares
The will should describe the holding as it actually exists. In a typical private deal for an Indian investor, the client does not own a building. The client owns shares in a US corporation, often called a blocker, that holds the interest in the property. A will that leaves "my US property" to a child describes something the client never held. One that names the corporation, the deal and the account holding the shares leaves far less room for dispute.
The will should also name an executor who can deal with US paperwork. When a non-resident who was not a US citizen dies, the IRS issues a transfer certificate once it is satisfied that any US estate tax has been paid or provided for. Its page on transfer certificates lists what it wants, including the will and any codicils, the death certificate and a notarised affidavit of US assets. Documents not in English need translations. The IRS says processing takes 12 to 18 months after it receives everything.
How heirs in India may hold the shares under FEMA
A resident heir needs a basis under FEMA to hold a foreign security. Schedule III of the Foreign Exchange Management (Overseas Investment) Rules, 2022 lets a resident individual acquire foreign securities by inheritance without any limit. The deceased must have been a person resident in India who held them in accordance with FEMA, or a person resident outside India. The RBI's Master Direction on overseas investment, updated as on 1 April 2026, adds that such an acquisition is not counted towards the Liberalised Remittance Scheme limit and need not be reported under it.
The condition in that rule points back to the client, so the evidence of a proper investment belongs with the will. That file includes the bank's LRS papers for the original remittance and the certificates for the tax collected at source, Form 133 from tax year 2026-27 and Form 27D before it, which the guide to TCS on foreign remittance explains. Together they show that the client held the shares in accordance with FEMA, which is the condition the rule sets.
Schedule FA and family members who fund each other
Once the shares pass, an heir who is resident and ordinarily resident in India reports them as a foreign asset in Schedule FA of the income tax return. The explainer on the Black Money Act and foreign property sets out the penalties for leaving one out. Many heirs will be reporting a foreign asset for the first time, so they should hear about it before their first return.
Family funding complicates the picture, because a will can pass only what the client owns. If the client gave a spouse the money for a US investment, the shares belong to the spouse and pass under the spouse's will. The income from them may still be clubbed with the client's income, since clubbing covers assets transferred to a spouse, a son's wife or a minor child. Gifts from relatives are generally exempt from tax for the person receiving them. The explainer on gifts to NRI children covers how gifts, the LRS limit and TCS interact. The advisor should map whose name each US holding is in before checking whose will covers it.
The US estate tax question runs separately
The US side starts from the asset, not from the family's paperwork in India. According to the IRS, stock of a US corporation is a US asset for estate tax even if a non-resident holds the certificates abroad. The executor must file Form 706-NA when the decedent's US assets exceed USD 60,000. India has an income tax treaty with the US but does not appear on the IRS list of estate and gift tax treaty countries, last updated on 8 September 2026. The guide to US estate tax for global investors covers rates, filing and planning. No Indian nomination or will changes whether US estate tax applies.
What advisors should cover at the year-end review
The advisor can cover the US holding in one meeting. It starts with a list of every US holding, showing the entity whose shares the client owns and the name each is held in. The will is then read for whether it names those holdings and a suitable executor.
An English copy of the will should exist. The remittance file, the TCS certificates and the deal documents go with the will. The heirs should know that Schedule FA will apply to them. The estate tax question is taken up on its own, with its own deadline and documents.
None of this changes what the heirs inherit. A private US real estate interest is illiquid and its transfer is restricted, so an heir may not be able to sell when they wish. The property's value can fall, tenants can leave, distributions may not be paid and capital can be lost. The rupee value moves with the exchange rate, and the transfer certificate alone can take more than a year.
Raveum offers eligible clients US real estate. Indian clients invest through a US corporation, a blocker, that holds the property interest, and they typically receive Form 1042-S. Raveum handles KYC, agreements and US tax forms. The will, the nominations and the client's Indian tax position stay with the client and their CA. Advisors can see how introductions work on Raveum's partner page.
The nominations a client updates this month do useful work in India. They do none for the US holding, and even in India the Supreme Court has said they do not decide who inherits. The will does that work, alongside a US process that starts from the asset and asks for the will by name. An advisor who checks both before the year ends leaves the family with papers that answer the questions its heirs will face. The guide to US commercial real estate for advisors covers the rest of the deal structure.
Frequently Asked Questions
Does a nominee become the owner of shares after the holder dies?
No. In Shakti Yezdani v. Jayanand Jayant Salgaonkar, decided on 14 December 2023, the Supreme Court held that succession law supersedes a nomination under the Companies Act, 1956 and the Depositories Act, 1996. The nominee receives the shares and holds them for the legal heirs or the beneficiaries named in the will.
Do Indian nominations apply to investments held abroad?
No. Indian nominations are recorded by Indian banks, depositories and fund houses under Indian rules. A corporation formed in the US keeps its own register and is not bound by them. For shares in a US corporation, the client's will and the US process for a deceased non-resident's assets decide what happens.
What should a will say about overseas assets?
It should describe each overseas asset as it legally exists, for example shares in a named US corporation rather than "my US property". It should name an executor able to deal with foreign paperwork and exist in English. The IRS asks for the will and any codicils before issuing a transfer certificate for a non-resident's US assets.
Can a resident Indian inherit foreign shares under FEMA?
Yes. The Overseas Investment Rules, 2022 let a resident individual inherit foreign securities without limit, from a resident who held them in accordance with FEMA or from a non-resident. The RBI's Master Direction on overseas investment, updated as on 1 April 2026, says such inheritance is not counted towards the LRS limit.
Do non-residents pay US estate tax on shares of a US company?
They can. The IRS treats stock of a US corporation as a US asset for estate tax, wherever the certificates are held. The executor of a non-resident who was not a US citizen must file Form 706-NA when US assets exceed USD 60,000. India has no estate tax treaty with the US.
What risks do heirs take on with a private US real estate holding?
Heirs inherit an illiquid interest whose transfer is restricted, so a quick sale may not be possible. The property's value can fall, distributions may stop and capital can be lost. The rupee value moves with the exchange rate, and the IRS says a transfer certificate takes 12 to 18 months after it has every document.
This article is for general education and is not tax, legal or investment advice. Rules change and depend on individual circumstances. All investing involves risk, including loss of capital, illiquidity and currency movements. Offerings on Raveum are available to eligible investors only and are not open to the general public.
