Life After Death:
Background
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Death is
a scary word. Your death is even scarier for your family. Just think for a
moment that you suddenly die! What happens to your family is really scary,
inasmuch as despite having everything, the family has no clue about your
finances. They don’t know about your money matters, how and where it is
invested, how to get hold of it, and what the worth of it is.
Background
§ The author, a visiting professor of management subjects has worked for over
25 years in a finance company and at a recent meet of ex-colleagues, they all
were sadly required to mourn the death of some of their colleagues. While that
in itself may not be unusual, it threw up a need to write a small compendium
for the benefit of surviving colleagues and their families to make them
prepared better to face sudden shocks in their otherwise smooth lives.
Background - continued
§ Its very true that the sad loss of a near and dear one is irreparable
§ All the readers are probably well settled in their own way and money may
not have been a matter of worry
§ Still a sudden and unfortunate event can make a smooth life topsy-turvy for
the surviving partner and it is with this in mind that this compendium is
prepared
§ The idea is not to scare anyone reading this, but to improve his / her
preparedness for sudden shock
The plan
§ It is not proposed that the reader will become a financial wizard by
studying this document, but if it creates a sense of urgency in the mind to
improve the preparedness to face shocks, the purpose will be served
§ The readers are perhaps in two categories, one where the husband is the
lead spouse and wife is next, or the wife is the lead spouse, so far as dealing
with finances and investments is concerned
§ Therefore the responsibility is more with the lead spouse conversant with
the basic nuances of investments
What it will cover
§ Types of financial and physical assets and the way of documenting the same
§ The need to understand web use to access and encash the underlying
securities
§ Information needed for different types of assets
§ Dealing with liabilities if any
§ Importance of nomination
§ Difference between nomination and will
What it will not cover and why
§ Different investment avenues and their risk profile
§ Choice of Shares, MFs, Bonds, PMS Schemes, other options like property
§ Most of you are investment wizards in your own way and no talk is needed to
educate you on that
§ Any advice in distribution of wealth in posterity
Types of financial and physical
assets
§ Bank Accounts
§ PPF Accounts
§ Demat Accounts for Shares, MFs, Bonds, IPOs etc
§ Portfolio Management Schemes / Wealth Advisory Services
§ Ongoing Insurance Policies
§ Ongoing Annuities like superannuation schemes or the older LIC pension
plans
§ Bullion in any form
Types of financial and physical
assets - continued
§ Property in the form of agricultural or non-agricultural land, farm house,
flat, shop or any other
§ Debit / Credit Cards
§ Medical Insurance Policies
§ Bank lockers, list of contents, key & locker number, where keys are
kept, photos of contents if possible
§ Time shares like Mahindra, Sterling, Country Club and any other, expiry
date, annual charges if applicable
§ Vehicles, insurance date, policy and risk carrier
§ Any shares or MFs which remained to be converted into demat
§ Loans given to family, friends, servants, maids
Liabilities
§ Pending Bills
§ Society charges, salaries, mode and frequency of payment
§ Borrowings if any such as vehicle loan, housing loan, Overdraft against
securities with applicable details
§ Loans availed
§ Credit card dues
Issues other than assets / liabilities
§ Dates on which life certificates to be submitted (usually November every
year) for EPS, any other pension
§ Any dead investments stuck up with or without possibility of future revival
§ Any legal matters pertaining to employers, family and others, case status,
names of contact persons
§ Pending Income Tax queries
§ Life memberships like clubs, charities, associations
§ Long term subscriptions like periodicals, magazines, cable TV, internet
connection
§ Manner of payment of pending bills like MTNL, electricity, mobiles, pipe
gas, society
Bank accounts and demat accounts
§ Information in a table form as to website address, purpose, login details,
password and PIN, linked mobile number, email id, branch address, relationship
manager if assigned, any standing instructions linked to the account, balance
as on XX.XX.XX etc. Note: Nomination is a must!
§ Similar information for demat account also. Approx value of securities as
on XX.XX.XX
§ For Bank accounts information like IFSC code, MICR code, operating
instructions, with / without cheque book, ATM or Debit Card/s linked
PPF accounts
§ The details like all other bank accounts
§ Date of opening
§ First date of maturity (15 years: Last date of financial year in which
account opened + 15 years + one day, i.e. 1st April) (Example: For
account opened on 1st March 2000, the first date of maturity will be
31-03-2000 plus 15 years plus one day, that is 01-04-2015)
§ If extended, the extended date of maturity which will be first date of
maturity + 5 or 10 or 15 years if extended more than once
§ Check minimum deposit of Rs 1000 p.a. to keep account active
Portfolio Management Schemes or
Wealth Management if outsourced
§ Name and contact details of PMS persons, web access details
§ Approx value as on XX.XX.XX, a recent date
§ Mandate, nomination, linked bank account details
§ Discretionary / non discretionary, lock-in period, entry / exit load, fee
structure, performance bonus if any
§ Performance snapshot at a glance
Life Insurance
§ Details of life insurance covers such as name and address of the insurance
company, policy number, type (term policy/ endowment / money back / limited
premium paying term / life policy
§ Accumulated bonus, fund value as on recent date
§ Mandate for choice of funds (equity / debt / combo / % allocation within
scheme)
§ Date of maturity on survival, any loans against policy if taken
§ Remember, for quick succession, nomination is a must!
Ongoing Annuities
§ Like say some superannuation scheme, Jeevan Dhara Policies or any other
annuity purchased by you
§ Corpus value which gives annuity, applied rate of interest
§ Term of the annuity if any (some annuities are life long or limited period
say 5 or 10 years), with or without return of capital sum or corpus)
§ Contact details, linked bank account details
Bullion
§ Gold or silver may have been purchased, inherited,
or gifted
§ It is useful to document the same, as to
approximate weight, purity, source of receipt or purchase, purchase invoices if
available, location where stored
§ It’s different ways in which men and women conceive
precious metals in their mind. A wife’s description of an item may be totally
unheard of by the husband. It’s best to keep a ready list of such items in
excel sheet form with insertion of photos of items. Excel can lend to easier
processing by sort, totals, sub-totals
Property
§ Location of storing original agreement, purchase
value, contact details of persons concerned such as society committee in case
of flat
§ Registration details if any
§ Periodical pay outs, amount, frequency
§ Approximate market value as on XX.XX.XX
Debit /
credit cards, medical insurance,
§ Limits, priority ranking for usage, expiry date,
PIN formula or PIN for debit or credit cards
§ For medical insurance, limits, terms, policy
document, copy of cashless form, renewal date, premium amount
§ All other classes of information needed as stated
earlier in this document.
Your wishes are paramount!
§ Living Will
§ Nominations
§ Last Will
Living Will
§ A living will takes effect while you are still alive
§ One may leave written instructions for family as to what treatment he / she
would like or not like to receive. An example, one may not want to live on life
support system, such as ventilator, or may not want to go in for by-pass
surgery. This will relieve the family of moral dilemmas, but has no particular
legal sanctity
Last Will
§ Last will means the last wish of the person about distribution of assets
and properties after the person’s death
§ Assets may be distributed unevenly as per one’s wish, preferably with
reasons there-for being documented, to avoid legal battles between family
factions
§ In absence of a will, Succession Act provisions will leave no choice post
your death
§ One may appoint an executor (which may include even a beneficiary) to
ensure adherence to the provisions and
the will must be signed by two witnesses, preferably including a doctor (who
can testify mental soundness of person while signing if need be in future)
Nomination and Will
§ Do you need a will when you have nominations?
§ Do you need nominations when you have a will?
§ Ideally you should have both!
§ If will signifies your last wish, nomination is the easiest way to achieve
the wish with least cost
§ Nomination will ensure, on an immediate basis, who will deal with the
underlying assets till provisions of the will are implemented
§ If neither a will nor a nomination is made, one’s family will have to
adhere to the provisions of succession act
Will making
§ The topic of will and the legalities associated with the same is fairly
complex and requires fuller and deeper understanding of the subject. It is not
the purpose of the present compendium to expound on the same
§ You may like to visit the link www.willjini.com and obtain a pdf document
providing answers to 37 FAQs
§ For the time being, suffice it to say that your will about your assets is
paramount and you should make a will
Is it too
much?
§ Actually on first reading it may sound an uphill
task to document this information, but let me assure you that it is not. It
needs about one hour input per day for a week, even if you have dabbled in all
this asset classes, and lesser if you have not
§ It is prime responsibility of the lead spouse to
make a word document and make it available in soft and hard copy easily
accessible to family
§ Since prime investors deal in these matters day-in
and day-out, most information is constantly processed in their mind 24*7*365
basis and don’t find the need to document it in structured manner as summarised
herein
§ For better preparedness to face adverse events,
this document is a minimum must as a first step. You are all experts to improve
on it with time. Update the document twice or at least once in a year.
Thank you!
§ Thanks for going through the document. I hope you could get some useful
ideas which you can implement. Remember you have slogged through your life.
Some time everyone has to say good bye, without getting time enough to say good
bye. It is meant for such people to make their families more secure and better
equipped to deal with sudden shocks and uncertainties.
§ Best wishes for a happy, healthy and wealthy life.
Send your feedback to: profsohani@gmail.com
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