Make your Investments Accessible to Family – TaxReturnWala

Family is the base from which we all evolve and hence it is held closest to our hearts. We make every effort to protect them and make arrangements for their wellbeing. However life is fragile and the unexpected happens. Even though we do not want to contemplate our mortality or that of our loved ones – it is a reality. Being prepared for it is the best gift we can give to our loved ones.

Imagine a scenario –

Anil is a software engineer working in an MNC at a good position. His wife Mina runs a small handicraft business from home. They have two children. Unfortunately, Anil meets with a fatal accident while returning from work one night.

Anil had always been concerned about the future so he had made appropriate investment decisions and taken insurance as well. He has also prepared a will. Unfortunately, he did not share the details of the accounts and policies with his spouse. He has the details all stored in his laptop – protected by passwords. The laptop is damaged, and spouse does not know any passwords, details of accounts, contacts of financial managers, location of the will etc. In the tough time after his demise, she is left struggling trying to figure out the financial situation. All the carefully planned investments and insurance is not within reach of the family in time of need – because he was not organized!!

This is a common situation. People are aware that they need insurance, need to save and invest, prepare a will, do estate planning – but frequently overlook the organization factor. And the grieving family has one more obstacle to face. Of course, they will figure out everything eventually but it will take time and effort.

So what can one do to prevent such a scenario?

First, acknowledge your mortality and be prepared. Make a will, get insurance; make investment; everything that Anil did.

Then – take the next step and get it all organized.

Prepare an organizer – online/ offline, that’s your choice. Get all your information in one place. This includes all your bank accounts, bank/ institution addresses & contacts, insurance policies, investment accounts, credit card details, lawyer address, locker details, location of property papers etc. Some people also list down other important contacts like doctors, insurance agent, etc. There are multiple organizers available online – PDF, Excel, and other formats. Choose one of them or design your own.

Give access to the Organizer – Now that sounds a little scary – having all your sensitive data in one place. So be cautious about where you store it and how it is accessible. If the Organizer is online, you can password protect that as well. Do not store the passwords for the bank accounts in the same document. Store that in a different location. But remember, we need to make it available to the family. So, you need to devise a system to have a trusted member of your family aware of the location of the document and the instructions to get to the passwords.

Some people have devised multiple layers of access – for e.g., giving organizer to one member and two keys to two other members who can access password location together. Design a system which works for you keeping in mind that you need high security with easy accessibility by the right persons.

Update – Make sure that all your accounts are updated with your current address and contact details. Also make sure that your nominee details are updated. You may have added your mother as a nominee on that insurance policy you took when you joined college – but now you may want your spouse or child on that.

Preparing the organizer once is not the end – things change. So you may need to have a look at your organizer at least annually to make sure everything is up to date.