How long would it take for the next of kin to access the estate of the deceased worth Rs 80 lakh?
Family “A” comprising the surviving wife and her two adult children, who are married, took all of eight years. During this period, the delay was on account of lack of awareness or documents not being found, documents not in order, interference from son-in-law or daughter-in-law or just sheer laziness.
Family “B” took about 17 years to sort things out and just imagine, things are still not completely sorted out. Family B is a large family with the late father who was head of the family, six children, their spouses and 10 grand-children. Family B had assets worth about Rs 4 crores, 17 years ago. There are still many issues left unresolved. The second generation has become old; almost all of them are senior citizens but they continue to have bad blood and malice for one another. Grandchildren have now started having children. Thus the stress and suffering is likely to engulf the fourth generation as well. All of this because the late father who created everything was so busy that he did not find time of a few hours in his entire lifetime or perhaps he did not seek any advice or may be he did not consider this to be important enough. He had a mindset from the 1920s to think the way he thought. But almost 100 years later have things really changed?
Who is responsible?
The head of the family without any element of doubt. It does not matter who is driving or taking care of matters in the household. It is the moral duty and responsibility of the head of the family to protect the interests of the weaker links of the family. It is also his responsibility to keep the nefarious elements of the family under control and to put everything in order while you are physically and mentally capable of doing so. What is the point of creating assets if we are going to be callous in protecting the interests of those for whom these assets have been created?
Putting things in order
Here are two things to get you started with. Doing this for your family would be a great achievement in itself.
1. Have a confidant
a. Someone must know. Someone you trust must know about your assets, liabilities, insurance, credit cards and commitments and just about everything that there is to know about your affairs.
b. You do not have to give updates on a month to month basis but start writing important things in a diary or a computer spreadsheet protected with a password.
c. This someone could be your best friend or spouse or some relative or anyone else you can trust. It is also a very good idea to have your lawyer, solicitor, financial planner (who has made your Will – this is important) to be appointed for this task.
d. This is someone who would be impartial and responsible to take charge for the state of affairs pertaining to you and your family. Further, this person has the capability and is willing to spend a good amount of money if need be. He can be reimbursed from your estate later.
e. You can start this process yourself and over time talk to financial planning firms, legal firms, banks that run such fiduciary services. It is good if you take time out, make an appointment and learn a few new things.
2. Create a Will
a. This is a statement of your wishes and instructions. Do not think this is just for the very rich and for the very old. The situation can be gruesome if there is an unfortunate demise and everything suddenly comes to a standstill.
b. Death can happen any time. Can you imagine for a moment how life would fall apart for spouse and children? Ask your spouse a hypothetical question. What would s/he do if you were suddenly not around any more? The silence would be scary, very scary.
c. Take a piece of paper and just make some notes in your own handwritten words, if you like and tell your confidant about it. Don’t fool anyone that you do not have 15 minutes to do this.
d. In the Will you have to nominate one person who will carry out your wishes and instructions as stated. This person is called executor.
It is of absolutely no consequence that you care for someone merely “in your mind”; your actions must demonstrate it. Inheritance planning or estate planning is one such action.