The pandemic has claimed many of our loved ones. At an uncertain time like this, it is important to shield our families from the financial repercussions of death and disease. One of the problems we are seeing is that many people succumbing to Covid-19 have left their families in the dark about their finances — where their bank accounts are, how much cash they had, where their investments and insurance policies are, and so on.

The families, already devastated by their deaths, now must deal with the additional burden of trying to dig out the details of their finances critical for sustenance. There are a few steps you can take to protect your family from falling into financial despair in your death.

Inform them, clearly

Let a trusted family member know about your bank accounts, investments, insurance, loans, dues etc. This person should ideally be your spouse or an immediate family member such as a child, parent, or sibling.
You can share the details of your finances in the most secure manner possible so that they do not fall in the wrong hands. Ideally, a password-protected file with additional layers of security would be ideal.
As of March 2019, a whopping Rs 25,000 crore existed in the RBI’s Depositors Education and Awareness Fund. This is money left unclaimed for 10 years in various bank accounts — money that should have passed on to someone’s family. Don’t keep your family in the dark about your finances because it could hurt them financially after your death. Educate and empower them now about what they need to do in the event of your untimely death.

Nominate your accounts

Every bank and investment account you own should have a clear nominee. If you haven’t nominated your accounts, you should do so at the earliest. This can be easily done online. The nominee should be ideally an immediate family member but can also be a non-relative.

In your death, the nominee becomes the caretaker of your asset. If the nominee is also the legal heir, they will inherit the asset, else they must pass on the asset to your legal heirs according to the laws of succession.

These are complicated legal matters that could get tricky if there is a dispute between your heirs.

Therefore, at the very least, clearly nominating your accounts would keep things simpler for your family and prevent too many heirs from becoming tangled in your financial affairs.

Consider creating a will

This may come across as a morbid idea, but it isn’t without its merits during a pandemic. Your assets must pass on to your heirs. But if the heirs have a dispute, they may be denied their rightful shares of your assets.

You could attempt to foresee and settle these problems in your lifetime by creating a will which outlines your succession plan.

A will is simple to create. It can be created on a regular piece of paper, signed by multiple witnesses, and should ideally be registered. You could look for details online or involve a local lawyer.

Without will & nomination

In case you do not nominate your accounts and also fail to create a will, things could get tricky for your family members.

For example, to close your bank account without nomination and to access its funds, your dependants will have to produce a legal heir certificate. They must also decide among themselves who the legal heirs would be and who among them would explicitly agree to give up this privilege.

The certificate is obtained via a court, and the process could take months. The process would only start after your death certificate has been obtained, which could also take weeks.

Mind the locker accounts

Some of your wealth may be tied to locker accounts where you store gold and other precious items. If you are the single holder of this account, your nominee can withdraw the locker’s contents after submitting a death claim.

For a joint account, the surviving account holder can access the locker only if it is in the “either or survivor” mode. Without it, the locker may be sealed and a death claim may be required to access its contents.
Therefore, you may want to check with your bank how your locker can be operated by your dependants after your death.

Avoid illegal access

If you believe that your family members could simply access your debit card or netbanking and withdraw the funds they need, you are wrong. Doing so would get them into trouble.

It is a violation of terms for another person (except joint holders) to use your bank account in any manner and could invite legal scrutiny.

Also, there may be multiple heirs to your assets, and they may initiate legal proceedings against any person making an unauthorised dip into your funds.

Streamlining your accounts, ensuring nomination, creating a will, and above all, having ample health and life insurance will help your family in your untimely demise. You owe it to them.

The writer is CEO, BankBazaar.com