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Learn how to protect your family’s financial future by drafting a proper financial will. Avoid unclaimed investments and ensure smooth wealth transfer to your children with these essential steps.
Around Rs 25,000 crore worth of shares and about nearly Rs 80,000 crore of bank deposits are lying unclaimed in the country. Protect your wealth by writing a proper Financial Will.
India has a substantial amount of unclaimed investments, such as old share certificates, fixed deposits, provident fund balances, and mutual fund units. According to an estimate, around Rs 25,000 crore worth of shares and about nearly Rs 80,000 crore of bank deposits are lying unclaimed in the country. These assets often remain unclaimed due to inadequate documentation or heirs being unaware of their existence. To avoid such a situation, a Financial Will comes in handy. Here’re key things you need to know:
What Is A Financial Will?
A financial will is a legal document specifying how your financial assets should be distributed among your heirs after your death. It helps avoid legal disputes, prevents assets from becoming unclaimed, and ensures a smooth transition of wealth.
Key Steps to Drafting a Financial Will
1. List All Your Financial Assets Before drafting a will, prepare a comprehensive list of all your financial assets, including: – Bank accounts (savings, fixed deposits, recurring deposits) – Shares, bonds, mutual funds, and ULIPs – Provident Fund (EPF, PPF, NPS) – Insurance policies – Real estate and other physical assets – Digital assets (crypto investments, online wallets, and demat accounts)
2. Identify Beneficiaries Clearly state the names of your children or other heirs who will inherit your assets. Specify the percentage of each share for the beneficiaries.
3. Appoint an Executor An executor ensures your will is carried out according to your wishes. Choose a trustworthy person, preferably a financial advisor, lawyer, or family member.
4. Mention Details of Nominees and Joint Holders Ensure your bank accounts, investments, and insurance policies have updated nominee details. If possible, choose joint holdings in bank accounts and investments to simplify the transition process.
5. Ensure Proper Documentation Keep both digital and physical records of all investment documents, property papers, and tax filings. Maintain a record of login credentials for online investments so your heirs can access them. Attach supporting documents such as PAN, Aadhaar, and property deeds.
6. Register the Will Although not mandatory, registering the will with a sub-registrar increases its legal standing and reduces the chances of disputes. A registered will is more difficult to challenge in court.
7. Keep the Will Updated Periodically review and update your financial will to reflect changes in your assets, new investments, or modifications in the list of beneficiaries.
Avoiding Common Pitfalls
Not Informing Your Family: Ensure your children know about the financial will and its location.
Ignoring Tax Implications: Consider tax liabilities when distributing assets.
Using Ambiguous Language: Ensure the will is clear and legally sound to avoid disputes.
Not Seeking Legal Help: Consult a financial planner or lawyer for expert guidance.
Writing a financial will is essential for securing your children’s financial future and preventing investments from becoming unclaimed. By maintaining proper documentation, appointing nominees, and keeping your will updated, you can ensure a smooth inheritance process. Taking these steps today will safeguard your family’s financial well-being tomorrow.
