India boasts the third highest number of billionaires in the world after the United States and China and is also home to some of the wealthiest families on the planet such as the Ambani family Adanis Nadars Tatas among others. But have you ever wondered how these billionaire families safeguard their giant fortunes? Let us find out. How Indias wealthiest families protect their wealth? According to industry insiders Indias leading business families and startup founders are increasingly turning to trusts to safeguard their wealth save taxes protect their assets from creditors and facilitate transfers. The trend gathered pace among the countrys rich in recent years which can be seen by analysing the ownership of many upcoming firms that have recently been listed on the stock market as startup founders often place their shares in private trusts before the company goes public. A recent example of this practice is Groww as the online stock broker firms promoters Lalit Keshre Harsh Jain Neeraj Singh and Ishaan Bansal gifted 15 million shares each to four family trusts ahead of the company upcoming IPO. However the phenomenon isnt limited to startups and new firms but is also practiced by giants like Gautam Adani and Radhakishan Damani. Data from the Prime Database reveals that promoters of 878 out of 2757 companies listed on the NSE hold their shares through trusts including prominent billionaires like Gautam Adani (Adani Group) Radhakishan Damani (Avenue Supermarts/DMart) Pankaj Patel (Zydus Lifesciences) Falguni Nayar (FSN E-commerce/Nykaa) Glenn Saldanha (Glenmark Pharma) BK Goenka (Welspun Enterprises) and Siddhartha Lal (Eicher Motors). Does SEBI allow promotes to place shares in trusts? As per data some private trusts even hold up to 90% or even 100% of a promoters total stake and market regulator SEBI has received numerous applications from family trusts seeking exemption from open offers to shareholders which happens when they purchase shares from an individual promoter or a corporate body such as a private limited company. SEBI can grant exemptions in cases where the transfer of shares is not purely monetary does not impact the interests of public shareholders the promoter group retains its stake and there is no change in control of the company. Why billionaires place assets in trusts? According to Noshir Dadrawala program director at the Center for Advancement of Philanthropy business founders across the globe often use trusts to distribute their holdings a good example being Tesla founder and CEO Elon Musk buying shares worth $1 billion in September through the Elon Musk Revocable Trust of which he is the trustee. Placing shares in a trust simplifies estate planning ensures smooth succession and protects control of the company says Pranav Haldea MD of Prime Database. From a legal perspective trusts make its easier to pass on wealth to the next generation reducing chances of family disputes and lengthy court battles. Private irrevocable trusts protect family inheritance and ensure unity in shareholding after the death of a major shareholder notes Vishwang Desai managing partner of the Desai & Dewanji law firm. Desai explains that while a will can be changed according to the whims of the person who makes the will trusts ensure clear rules about how a persons assets are distributed among his heir after his/her demise. The person making the will may later act contrary to the familys prior understanding as the shares and property remain their personal property until their death. Wills change with the wind. Children or others can influence the writer. But by placing assets like shares in a trust you are protected from your own changes Desai says.