Heirs must know what you own to claim wealth

 Heirs must know what you own to claim wealth

Appoint nominees and write a will to make the transfer hassle-free

The Reserve Bank of India recently announced that it will start a new portal that will provide information on unclaimed bank deposits to facilitate the search for untraceable money.

Not just unclaimed bank deposits, there are thousands of crores locked in unclaimed shares and insurance policies lying with many institution across India. While  policymakers  and regulators will do their best to ensure that this money reaches the right person. It is better to ensure such a situation never arises.

Make a list of investments

The starting point for smooth wealth transfer is to make a list of all your investments. “When the owner of an asset dies, the spouse of family members often doesn’t know what assets the deceased owned. Even if they have the list of asset, they don’t’ know where their document is kept to support their claim. It is imperative to maintain detailed information on assets (immovable and movable) and to share this information with the spouse and other information with the spouse and other direct family member.

Mutual Fund (MF) investors can avail the consolidated account statement offered by registrar and transfer agents (RTAs) showing all MF holdings.   

Share password with caution

Since many assets are held in digital format, sharing access details can be considered. “You can use password vaults to share access to your email. You may even share access to your mobile phone with loved ones, if privacy concerns allow.

However, in the event of death of the investor, the passwords should be used by the near ones only to know about the investments details. They should not be used to carry out transactions. “Sharing of password with the family with the objective of wealth retrieval by selling or monetising securities –held solely or jointly with a deceased owner- amount to impersonation and invites criminal charges. If the nominee or joint holder operates the account digitally for market transactions or for off-market transactions, it is an office, ”warns Dutta.

Seed your contact details

In many cases, people lose track of investments because the concerned financial institutions fail to reach them. Not only must you should also provide your latest email ID and mobile number in all your investment accounts. “Consolidate your relationship and digitise them as far as possible. Make sure your phone number and email are updated on each one. It is also advisable to hold investments in joint from with your spouse

Specify nominee

While making investments, don’t leave the nomination section blank. You can appoint more than one person as nominee and specify the share of each one. “Ensure that all investments have a nomination so that he transmission or succession process becomes relatively easy,  “founder and chief executive officer, plan Ahead Wealth Advisors.

You can change the nominee as many times as you want in your lifetime. “Remember that a nominee is merely a caretaker, custodian, or trustee representing the legitimate heirs.

An overriding Will

All those who have accumulated lifetime must write a Will. It helps transmit your assets to the persons whom you choose to transfer them to. “A Will overrides a nomination, and hence is critical. Make sure the executors are aware where the latest Will is stored, “says Dhawan.

A will not only specifies the inheritors but also the proportion in which the assets should be distributed among the legal heirs. “A valid will enable distribution of assets to beneficiaries, whereas a nomination merely helps in naming a custodian or trustee representing the heirs of future beneficiaries, “says Dutta.

Be prudent while writing a Will. Involve professionals if you need to and get it registered. As in the case of nomination, a will can also be changed as many times as you like.

While you do not need to inform your loved ones about the exact details of your Will, they should know where and with whom the document is kept.

HNIs SHOULD OPT FOR TRUSTS

A Will is adequate for a family with limited assets, where the sole intent is to distribute the property to individuals.

For HNIs and wealthy business persons, a trust is a better option as it provides the flexibility to allocate money for host of different purposes.

For business owners, an additional benefit is that lenders and creditors can’t ask a court to liquidate the assets of a trust in the event of business failure.

The formation of a trust is, however, more expensive than drafting a Will.

For More Details: Pooja Manoj Gupta, visit www.giia26.com
Email: pmgiia26.com Mobile 9868944340