Financial Planning
Business
- On Feb 19, 2025
- By Avinash Kumar
Hello Friends,
Life's Unpredictability
Life often surprises us with something unexpected. Kavita and Mukul (Name changed) were living in a good society in Mumbai. Mukul was down to earth, hardworking, DIY person was working with an MNC. Like other IT professional he keeps all his record safe in his Laptop, property/ vehicle papers, demat a/c and MF holdings, Bank details etc. Everything was online for him, his to-do list, his e-bill and his bank statements in his email only. He even maintained a folder which said IMPWDS. Wherein he stored all login id and passwords for all his online accounts. And even his laptop had a password. Techie guy so all the passwords were alpha-numeric with a special character not an easy one to crack. As safety policy says, passwords needed to be changed every 30 days.
Kavita, Post Graduate from Patna University was a home maker, with 2 kids, liked to focus on family, was well managed person. She never bothered in asking the password of his laptop whenever she realize it’s a new password again. She would simply opt for asking him ‘What’s the latest password’ instead of taking the strain to memories it.
You may think, Kavita, being a Post Graduate would means everything is documented and filed properly. Like other’s many of my well educated friends would agree that the precision we follow with our office documents and papers do not follow the same in to our day to day home life. At office you have been epitome of Reliability / Competent / Diligent etc, but at home front, there is always a tomorrow.
Once in the first wave of Covid, in year 2020, Mukul survived due to his strong will power but in the year 2023 he fell ill once again. He did not want to demoralise his wife Kavita about the health condition and kept saying “don’t worry, I will get well soon”. And he did not share his laptop password, details of investment and others things, to access, in case mishap and died in Feb 2024.
Now, she has no access of his laptop password, IMPWDS file, and rest of the things. The property they were owing was on loan, this has been settled by home insurance policy but it could not be easily transferred to her name as the “WILL” was not there, same problem arises for Mukul’s Vehicle, a and bank a/c. The bank a/c were old enough and nomination was not changes since then. She was unable to claim the money lying there. Investment made in Mukul’s demat a/c cannot be transferred easily due unavailability of access.
His all the unpaid and paid leaves were got exhausted. After his demise his company paid a few lakh of rupees to Kavita but that were not enough to survive in this world with 2 small kids. She got the information about the holding with the help of brothers and in laws.
Somehow I came to know this via her brother, and offered a helping hand in getting Financial Investment getting in her name, from the process of getting signature attested from bank, getting death certificate notary, collecting required document to submit to all the respected AMC’s, physically visit to get the status, as we were not the service provider, this financial industry doesn’t reveal information to third party. I advised her to make a “Will” too, to avoid such incident in future. Probably they would have laughed at me if I had told them to make a “Will” and arrange all the paper work for misfortune.
Lessons learnt this hard way were meant to be shared. After all why should the people whom we love the most suffer after we are no more?
Here are a few critical steps to safeguard your family’s future:
1. Check All Your Nominations:
o Ensure all your financial accounts, investments, and insurance policies have updated nominees.o Often, we list parents or other relatives as nominees and forget to update this information. It is crucial to verify and update these details periodically.
2. Maintain a Record of Passwords:
o With the increasing digitization of our lives, we have passwords for practically everything: emails, bank accounts, and even devices.o Make sure to maintain a secure and accessible list of all these passwords for your next of kin.
3. Document Your Investments:
o Regularly update an inventory of your investments, both physical and digital.o Keep copies of these records in a secure yet accessible place. This will ease the burden on your family in case of an unforeseen event.
4. Draft a Will:
o A will simplifies the legal process and helps in distributing your assets according to your wishes.o Without a will, the process can become a cumbersome and lengthy ordeal involving indemnity bonds, notaries, and obtaining no-objection certificates from other heirs.
5. Review Liabilities and Insurances:
o When taking out loans for significant purchases like a house or a car, consider the ‘what ifs’.o Ensure you have adequate insurance to cover your liabilities in case of death or job loss. This can prevent financial strain on your family during an already challenging time.
Conclusion
Kavita’s battles highlight the importance of taking proactive steps in financial planning. As financial advisors, we always emphasize on “Be prepared”. While we cannot predict the future, we can certainly take steps to ensure our loved ones are protected and cared for, even after we are no longer around.Stay prepared and take the necessary steps today to secure your family’s future.