Are You Prepared to Die???
Err. What type of question is this? You must be wondering ‘am I out of my minds’ to ask such type of question. You read it right but understood it wrong.
The question exactly means – “What if you die today? Have you planned your ‘after-life’ for your family?”
Now this article is definitely not about taking or investing in any insurance. Everyone who is financially literate to some extent is aware about the importance of the need for insurance. The attempt to write an article is far ahead than just insurance.
Few years ago, one of my clients passed away at an early age in an accident. That was a deep grief for the family. I have seen the after effects of the incident. After the demise, the father and other dependent members of the family were in stress apart from the grief of the loss of the person. The stress was of settlement of financial transactions.
The settlement included various types of transactions like, bank accounts, fixed deposits, investment in shares and securities, trade payables, loans taken and given and so on. Most of these were rather not known to the family. The family has passed through so much of hardships that can’t be exactly expressed in words. I have witnessed many such cases apart from the above one.
Following are few things that should be followed as a part of financial planning so that your after-life is not painful for your family in financial matter. (Definitely, the pain of loss of the person is inevitable.)
· Keep your insurance policies up-to-date. No matter what, but don’t skip the payment of your insurance premium. You can compromise with any other luxury or need in your life, but please don’t compromise with the insurance premium of the policies taken.
· Keep the nomination status for all your financial assets updated. Transfer of any financial asset with nomination registered is very simple and easy process as compared to those where nomination is not registered. Nominations can be registered for all financial assets including bank accounts, fixed and recurring deposits, bank lockers, shares (demat accounts), mutual funds, bonds and securities, insurance policies, etc.
· Keep a list of advances given and advance taken even on personal basis. Failing to do this may result in heavy losses as in case lack of information about loans advanced there is a very low possibility of the recovery of such advances.
· Maintain a list of all financial assets category wise that can be easily accessible in your permanent absence. That will keep your family away from extra stress in an hour already of grief.
· Also maintain a list of all immovable properties held by you, either singly or jointly also accessible in your permanent absence.
· Keep all the financial instruments (in materialized form), property documents, other key papers at one single and secure place.
· Discuss all major financial transactions and decisions with the key members in your family. These can be parents, spouse, etc.
· In addition to above, it is highly recommended that you should prepare your will so as to avoid any sort of dispute in your family in your after-life.
These tips are useful not just in your after-life for your family, but also during your lifetime. These can help you for an effective financial planning. All these are simple and easy steps that can be taken to avoid any inconvenience and stress during time or after your life.
CA. Amol G. Kabra, Latur