Have You Planned, What Happens After You?
Have you put together your After You file?
It is coming to the end of 2021.
Another year that truly flew past. It also gave us a very strong case of deja vu. We had a Covid wave, lockdown and resurgent economy akin to 2020.
While one might think we would be better prepared, we were not. This post is a sobering one, there, you have been warned.
Unclaimed Wealth
First up, a look at unclaimed wealth in bank accounts, deposits, life insurance and funds
You can refer to these articles for further reading:
Between these, the numbers vary, let me pick the middle one, for the sake of making a point.
Unclaimed wealth across bank accounts, PF and insurance: 90,000+ crores.
Of this PF is about 25,000 crores
Bank accounts another 24,000+ crores
In LIC, a total of ₹15,000+ crore is lying after the policyholders did not claim it.
Apart from this, ₹18,000+ crores in inactive mutual fund accounts.
That is a lot of money with no owners.
Whose money is this?
So, who does this money belong to?
The life insurance money should have gone to the family of the insured person. The money in the bank accounts and deposits should have gone to the account holder’s family.
I can only guess as to the reasons that this money is unclaimed:
- The people dont need the money (yeah!)
- The insured’s family did not know about the life insurance
- The insured’s family did not have knowledge of how to claim
- The bank deposits did not have a clear nominee
- The deceased’s family did not know there was a bank deposit
You get the drift here right?!
You invest for your families wealth and happiness. You get insurance to safeguard your family. But what is the point of it all if you do not inform them about it.
It is also your duty to make sure the wealth and security flow through to your family.
This requires you to inform and educate.
Inform and educate
While mortality is always a difficult conversation, it is important to have it. Speak to your partner, your kids about money and how you have taken steps to assure their future.
Of course, the first step is to complete the nominee details in your bank accounts. The next step is to write a will to simplify the flow of money to your family. I have covered the will in a separate post here.
This post is to nudge you to make sure all the relevant details are available to your family in whichever form.
You could use a shared spreadsheet( This is my preferred method – a shared sheet on Google Drive).
You could use a more traditional method like a notebook to capture all the details
You could find a software (or an app) that does this etc.
Whatever method you use, this is a must-do.
No better time than the end of the year to complete this simple, onerous and super-important task.
What information do you need to capture
Let me simplify this further for you.
Below is a list (not exhaustive) of the things you need to note down at a minimum:
Important ID document details:
PAN Card, Voters ID, Aadhar, Driving License, Passport
Important People:
Financial advisor, insurance agent, chartered accountant, lawyer
Other important documents:
Property related documents, any contracts (rental etc.)
Important website/app related details:
Bank account, stockbroker, email, shared drive, investment apps etc.
Asset details:
Bank accounts:
Name of bank, customer ID (or equivalent) and account number
Investments:
Fixed Deposits and any other deposits (recurring, Post office, company etc.)
Mutual fund investments Stock investments
International investments
ESOPs, share grants etc.
PPF and PF details
Bank Lockers (list of contents inside the locker)
National Pension Fund details
Insurance:
Life Insurance, Vehicle Insurance
Health insurance (include cards needed etc.)
Property:
Property papers (scan and put in a shared drive), tax paid receipts
Under-construction properties
Mortgages
Liabilities:
Home loan, car loan, personal loan
Credit cards (list all cards you hold)
Income tax details: Last couple of years ITR
and finally a copy of your Will.
The above list looks long. However, if you were to sit and actually create it, it should not be more than an hours worth of effort.
The pandemic has brought us all in contact with our mortality. We have all lost someone we knew and many times it has been too close for comfort. We have learnt significant lessons about physical fitness and healthy habits. We should also learn financial prudence lessons.
Creating an after list should be one of the most important things we do this Dec.
Key Takeaways:
There is a lot of unclaimed wealth lying with banks, insurers and fund houses
This is money that would have benefited families who probably lost a loved one
It is our duty to make sure our family benefits from the effort we have put in for them
We need to put together the details that are important for our family to know about our finances
NOW is a great time to do this
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.
