Planning for Death
Preparation for death – why and how are two important questions, which I have been thinking about. No, I am not talking about the metaphysical realities of after death life. I am concerned about what is left here on this planet. We come empty handed, we go empty handed but we may never want our earnings to go to someone other than our dependents. Death is a harsh reality and we should be well prepared for it, specially in the interest of our dependents.
Last year, my husband’s sister ( my sis-in-law) lost her husband. He was in late seventies, a cancer patient who had fought cancer valiantly but succumbed to it in the end. My sis-in-law is a cancer survivor. After the initial shock, one needs to work on the legal aspect of material belongings. Her struggle to get savings bank accounts, property , equities and other investments transferred in her name has gave me goosebumps and forced me and my husband who is Chartered Accountant by profession to analyze such situation. We came out of some simple guidelines to make our investments secure, easy to transfer to the survivors, safeguarding the interests of the partner, who is left behind.
“Will” is a document, we all must have , specially after crossing half a century, if not earlier. I have thought a lot about a “Will” but could not reach a conclusion about a fool-proof “Will” because of several complications.
A “Will” can be registered but it is not very clear if bank will accept a registered “Will” without probate. This is so because there is no clarity in law about the need to get a “Registered Will” probated. The banks will ask the beneficiary to submit a ” probated Will” which requires court proceedings.
My sis-in-law is struggling for last 11 months to get the FD’s and bank accounts in her name. She is in Hyderabad and as per law, “probated Will” is not required in Hyderabad. Bank is taking the plea, that their head office is in Mumbai and “Probate Will” is a requirement there. A very absurd argument as the claimant is guided by her location and not bank’s.
An unregistered “Will” does not serve any purpose.
(`Probate Order’ herein means certification of copy of a Will by Court, which is to be treated as a direct evidence of the authenticity of a will. In other words, probate is treated as conclusive evidence of genuineness of the will).
I am consulting some professionals to know if a “Joint Will” executed by Husband & Wife with children as beneficiaries who will get property only after BOTH of them pass away will be a better option. This may take some time.
But in the meanwhile, if some actions like below are taken, there is no requirement of a “Will” at all (at least) for amount held in Bank Accounts and the amounts get passed on to the nominees smoothly without a “Will”.
For bank accounts:-
Amount in Bank (saving as well as FD):
- All bank accounts MUST have a nominee. Nomination Forms of bank requires us to mention relationship with the nominee. If a nominee is noted with bank, the bank will ask for only a death certificate & pay the money to nominee after establishing his identity and relationship with the deceased person. (Passport carries names of father & mother and will be an adequate proof). If no nominee is noted with bank, they will ask for a “Will”.
- The nomination given for bank account is considered for FDs also unless we make separate nominee for each FD. Since FDs keep changing, it is better not to make any nominee for an FD but ensure that the bank account to which such FDs are attached, do have a nominee registered with bank.
- All bank accounts and FDs must be in joint names only with operating instruction as “either or survivor”. It is important to check with bank that this operating instruction is there.
- Till any of the two (husband & wife) is alive, nominee has no right on any money. After the death of both, whosoever is the nominee can get the amount from the bank.
- Since the bank can note only one nominee for one account. Therefore it is better that we have two or more joint accounts in different banks – each having a different nominee and try to keep equal amount of money in each. (Even if money kept is not equal, it is expected that the children will have the understanding to share it equally). (Number of joint accounts may be equal to number of children.)
If we are able to do the above, there is no requirement of a “Will” at all and the money will get transferred to nominee smoothly.
This takes care of money held in Banks.
Investments in Shares & Mutual Funds:
These should be held positively in dematerialised Form in a Demat Account called Depository. It’s advisable to keep Demat accounts also in joint names only. One Nominee MUST be registered with the Depository. If a nominee is registered with Depository, the Depository takes action to transmit shares & Mutual Funds to the nominee registered with them. But again only one nominee is possible.
Immovable Property like House:
- It should be held / registered in joint names.
- A REGISTERED “Will” IS REQUIRED for transferring immovable property to survivors smoothly otherwise they will have to follow a “succession” process through Court.
These are few simplistic methods to pass on the baton to the survivors, once the owner goes back to his/her creator.
Following these methods, the property and money will be transferred to children without getting into legal process of courts.
*Pics are from Google. Credit to the photographer.