Financial planning tips: 5 important disclosures to your spouse to deal with untimely demise

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Published: June 9, 2016 11:51 AM

Financial planning tips on dealing with untimely death: It is very important to instruct your spouse clearly and specifically about your finances in order to prepare them for an emergency.

5 important disclosures to your spouse to deal with untimely demiseFinancial planning tips on dealing with untimely death: It is very important to instruct your spouse clearly and specifically about your finances in order to prepare them for an emergency.

Death can come to us at any point. If you are the sole earner of the family, it is your duty to not just secure the family’s financial future, but also instruct the family on what to do with your financial portfolio in case of your untimely demise.

In India, there are huge, unclaimed sums of money locked in various accounts pertaining to banks, shares, mutual funds, fixed deposits, post office funds, etc. These accounts belong to deceased who didn’t issue clear instructions to their family about what to do with these accounts in case of their death.

It is very important to instruct your spouse clearly and specifically about your finances in order to prepare them for an emergency. This would ensure that your efforts as the family’s bread earner were not in vain.

Here are some financial disclosures you must make to your spouse before your death.

Insurance and bank accounts
A. Insurance is the most important tool that takes care of a family’s financial needs after the demise of the insured. The vital information that must be disclosed to the spouse includes details of insurance plan, total sum assured under various policies, policy numbers, name of insurance compan and any special conditions attached to it.

B. The details of each bank account, names of bank, associated fixed and recurring deposits, passwords, ATM pins, lockers, etc. must be informed to the spouse. It is crucial to declare a nominee in all the bank accounts as this would ease the process of claiming the funds after the account holder’s death. The details of cheques issued and the whereabouts of the cheque book should be known to the spouse to avoid its misuse.

Details of every property with complete information and exact addresses of each property should be disclosed to the spouse. Papers related to property should be kept up to date, i.e. its rent receipt and mutation, etc. should be maintained properly at a specific place known to the spouse.

Other investment disclosure
Your spouse must be told of investments such as post office savings, mutual funds, stocks and bullion. All papers related to investments should be maintained at one place. These days, investment-related documents are often sent through the email, therefore such mails should be properly labelled and saved in the appropriate folders. Most investments are linked to your PAN number. So the access to these investments can be done through a PAN number and passwords. All such passwords should be disclosed to your spouse securely.
Sometimes, big amounts are lent to friends and relatives. Details of such lending should be disclosed to the spouse so that the amount can be recovered.

Due from employer/debtors
If you are in a salaried profession, then the amount due from the employer should be revealed to the spouse. The details of dues, i.e. type of debt, date, and returning condition should also be disclosed. These may include dues in a PF account, annuity, insurance, EPF etc. If you are a businessman, then all types of dues from debtors should be disclosed to wife for recovery, especially if the business is a proprietorship. If it is a partnership, details like the partner’s share, the amount invested, and other terms and conditions, should be disclosed to spouse so that he/she can become a beneficiary in case of death.

Inform your spouse about your financial obligations: bank loans, amount borrowed from friends and relatives, dues to creditors, etc. What amount has been borrowed, at what interest rate, tenure of the loan, collateral placed for the loan etc. should be disclosed. The disclosure should also be made for the insurance taken, if any, to cover the loan. The amounts due to friends and relatives should help the spouse pay back genuine creditors while rejecting the fake ones. There are certain smaller liabilities also such as income tax due, sales tax dues, municipal rent, etc. which should be disclosed.

The details of each and every asset and liabilities should be kept safe in such a place which the spouse can access easily. A proper record should be maintained in a diary or excel sheet and the details should be shared with the spouse. A copy of documents related to investments, property, insurance, business, bank account etc. should be shared appropriately. Passwords of email, bank account login, insurance login etc. should be written in the diary which she can access whenever required. It is also very important to disclose the nominee detail of each and every place where nomination has been declared.

A little care can safeguard the financial stability of your family.

The author is CEO

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