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A widow of a non-resident Indian (NRI) approached Malhar Majumder for help two years ago. She knew that her husband had made investments. But she had no clue about them. Majumder, a partner at Positive Vibes, a mutual fund distribution company, helped her recover around 1.7 crore.

“As she was the legal heir, I asked her to arrange long-term statements of his bank accounts. We went through each transaction to check his investments and insurance. It took us about two years to recover the money," said Majumder.

It took them time due to multiple issues. For example, the nominee in the deceased’s public provident fund or PPF was his mother, who had died much before him. The life insurance company rejected his wife’s claim on the grounds of false disclosure; the agent who filled the form entered his occupation as a trader from Jalpaiguri, when he was a salaried engineer working in West Asia.

It is not a unique case. “It’s rare to find people who share a list of assets, insurance and investments with family members or a trusted source," said Suresh Sadagopan, founder, Ladder7 Financial Advisories, a Sebi-registered investment adviser.

The rise in life insurance sales shows that the covid-19 pandemic has reminded many that life is uncertain. However, buying an insurance policy or making investments is not enough. You also need to ensure that after your death, those are passed on to the loved ones smoothly.

Here’s a checklist.

MAKE A WILL

A Will works out to be the best solution when someone wants to bequeath assets to their loved ones. In the absence of a Will, the estate is distributed based on the succession acts. Therefore, make a Will, register it, and preferably, video record the entire process to avoid disputes.

UPDATENOMINATIONS

Most people don’t bother about checking whether they have a nominee added to their financial assets. Even though you may have added a nominee, many times, it’s not reflected in your account.

“I have personally experienced it with a brokerage. When I checked why the nominee was not reflecting in the account, I got to know that there was a technical error," said Deepesh Raghaw, a Sebi-registered investment adviser and founder of PersonalFinancePlan.

Updating the nominee is not difficult. It requires the individual to be proactive. These days, most people are opening stockbroking accounts online. In such cases, brokers don’t offer a nomination facility online. Customers must download the nomination form, fill it and post the physical copy to the broker with their signatures.

Besides updating the nominee in mutual funds, insurance, demat, provident fund, small savings schemes, bank accounts and lockers, also do it with your employer for gratuity and leave encashment.

Many times, there could also be a clerical issue even though you have the nominee in place.

“A mismatch in Aadhaar or PAN card can also create problems. In all documents, the first name, second name and father’s or husband’s name should be in the same order," said Majumder.

He also pointed out that a nominee is a must in health and motor insurance policies. If a person dies while undergoing treatment in a hospital that does not have a cashless facility, insurers pay the settlement money to nominees.

In the case of motor insurance, there could be a personal accident cover and also claims due to accidents. The family member may need to approach the Motor Accident Claims Tribunal to get awarded by the other party involved in the accident.

Do remember that a nominee is considered as the custodian of assets. The actual ownership lies with the legal heirs after the death of the estate owner. It’s, therefore, best to make the legal heirs as nominees to avoid disputes later on.

KEEP LOVED ONES UPDATED

According to investment advisers, families don’t like to discuss the financial implications if the breadwinner dies.

“In most cases, if someone talks about it with their spouse or a close relative, the latter postpones the conversation by saying that they don’t want to discuss the subject," said Raghaw.

If your loved ones are not aware of the assets when you are alive, they may never get to know about them after your death.

The best thing is to make a list of the estate and let your loved ones know about it.

It’s an exercise that will not only help your loved ones after you are gone but help you keep track of your investments and savings while you are alive.

It’s common that an individual invests in multiple avenues. Over time, even they are fatigued with the number of investments made and lose track.

“We have handled clients with 83 National Savings Certificates and also someone who invested in over 40 mutual funds in over 15 years and lost track of some of them," said Sadagopan.

“Those who have made a Will, we suggest them to add the list of investments, savings, insurance, property and other assets as an annexure, and to update it every year," Sadagopan added.

AN EASIER OPTION

If you are pressed for time as of now, start with forwarding emails of major investments to your spouse or someone you trust. It can be mutual fund investment or insurance policies.

Another option is to make a common email account with your spouse or a trusted person and maintain copies of your assets in it.

The least that a person can do is to keep the loved ones updated about financial assets. If they are aware, they can eventually get it.

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