[Mahesh Babu]

Interesting, eye-opening thread, something which all of us would have to cope with one day. Going through the treasure house of information, the importance of will and the idea of joint holdings are definitely great. But many members suggest sharing of passwords with spouse or children so that they can access the investments and liquidate them at will, but is it legal? Can someone handle the investments of a deceased person and possibly sell say shares or mutual funds and transfer the money to a joint account where they can withdraw just because they have access to the log in information? What if the same has been passed on to another son or daughter in his will? I think lawyers in the forum can shed more light on this.

[V.Narayan]

The requirements are not a lot but most of us ignore even these.

My experiences over last 16 years of having thrice been the executor of a will of a deceased relative are as follows:-

1. Nominee for all your assets and investments - it is a fig leaf but it helps.

2. As far as possible keep all investments in joint names of spouses. If the children are 18+ they can be one of the joint holders too.

3. Make a will and always register it. Name a trusted person to be the executor. In my case my wife is the executor

4. Resist the temptation of putting your name (i.e. Indian male, head of the household) first. Divide the assets' first name holder between the two spouses

5. Sit one or two family members down on where the investment papers are, share the passwords, and whom to contact in case of your demise.

This last one is very important to ensure a smooth transition. In my case my wife has zero interest in money matters so I have educated my kids and walked them through the steps to follow when I go.

The simplest to transition are fixed deposits with a bank. The most difficult are land deeds and in some cases portfolio management schemes with a wealth advisor. As we age it helps to shed your load. As an example I have knocked of all my real estate assets other than the house I live in.

[deepak_misra]

I dont want to quote all the individual replies, and I am not adding too much new.

Just making following checklist in one place

1) Ensure that all accounts are joint accounts with either or
2) All investments etc are in one excel sheet with details of account, nomination, login, password. Keep updating this periodically
3) All email and comp and phone password are in the same sheet
4) password protect the excel. (What I did earlier was to write the password on a sticky note which was stuck on my cupboard without any explanation but was known to all family members.

IN a separate file make all your non financial wishes known (organ donation.....). This is for any eventuality which is the euphemism used by the insurance industry for distasteful topics that most of us Indians dont like to discuss. This can be as detailed as possible and give point by point instructions. There are a lot of obscure things that need to be done such as EPF, pension, ...... . Time permitting , give the links or forms in one place

I am not sure of the legalities of liquidating primary members investments but will check up on this point and maybe update

The will depends on the trust factor within family

If disputes are foreseen, then better to register the will.

If not disputes are foreseen, a plain paper will can be made. it is a good idea to have a lawyer draw up will to avoid any technical issues that could invalidate the will. For example you need 2 witnesses who see you signing the will and sign together. The witnesses should be independent and not beneficiaries. However there are more enough templates to make this yourself

Indians always ignore this aspect of planning. I have heard horror stories during Covid of family members lost on demise of spouse since they did ot have any idea of the investments and net worth etc.
I would strongly recommend everyone starts this excersize right away and have a system to review, update and share

[DigitalOne]

Many have written about having a single file with all the details, passwords etc noted down. I have also maintained a similar document.

I have a query. Is it legal to operate an account (bank/MF...) when a spouse passes away, without going through the nominee transfer process? The surviving spouse will eventually get to the transfer process by submitting the death certificate, but in case there are transactions after the day of death, do banks create an issue?

[ruskinash]

Originally Posted by DigitalOne

I have a query. Is it legal to operate an account (bank/MF...) when a spouse passes away, without going through the nominee transfer process? The surviving spouse will eventually get to the transfer process by submitting the death certificate, but in case there are transactions after the day of death, do banks create an issue?

I believe this amounts to fraud. A bank or investment account that isn't jointly owned shouldn't be operated after the demise of the account holder.
The bank has to be intimated about the death of the account holder, and after due process, the funds will be transferred to the nominee.

[vijaykr]

Originally Posted by DigitalOne

I have a query. Is it legal to operate an account (bank/MF...) when a spouse passes away, without going through the nominee transfer process? The surviving spouse will eventually get to the transfer process by submitting the death certificate, but in case there are transactions after the day of death, do banks create an issue?

I have wondered about this one for some time now. It sounds easy enough to liquidate the deceased's bank accounts by transferring to another one and then ask the bank to close the account with only min balance required. Maybe it is the paranoia of not knowing what to expect in terms of time delays which is causing me to think like this. The banks might still be manageable, but I wonder how easy or difficult it will be for the MF/demat holdings with shares and RBI bonds/SGBs as this comprises majority of the holdings. Even though there is nominee setup on each one, some of these holdings are in single names - either me or my spouse (not sure what I was thinking then ) I may have to read up on the process of transferring MFs/demat accounts to nominees after the holder is deceased, but I have heard of significant delays with onerous documentation requirements before the investments are moved to the nominee. So this makes me worried a bit as well.

I too have done a comprehensive Excel with info of every asset with as much details as possible minus the passwords. This I have given to my siblings so they have a full picture and can track these down. The passwords only for each of these bank/investments is a separate Excel shared with my adult kids with the understanding that they should share this with my siblings in case both of us are gone. But still given the diversification done over the years across accounts/investments, I expect this to be a non-trivial task to ensure things are completely transferred over to the children.

The pending activity which I have discussed a few times with my advisor and spouse is will creation. While it is easy enough to just indicate everything should be divided equally amongst the children barring bequests to causes close to our heart, somehow have not got around to putting pen to paper on this one.

This thread is a timely reminder to not put it off further. End of 2024 is the new target for having this one

[Bsimhan]

Originally Posted by V.Narayan

The requirements are not a lot but most of us ignore even these.

My experiences over last 16 years of having thrice been the executor of a will of a deceased relative are as follows:-

1. Nominee for all your assets and investments - it is a fig leaf but it helps.

2. As far as possible keep all investments in joint names of spouses. If the children are 18+ they can be one of the joint holders too.

Narayan sir, this is with reference to point 2 and 1. I have been having all my investments in Joint names till recently. However, I faced an issue in that in case of joint investments, neither can be a nominee in case of death. Now if there is a death, it goes without saying that the survivor would get the proceeds or the investment. However, recently the issue came about that the Account/Mutual Fund does not have a nominee attached to it. I kept getting reminders and daunting emails and therefore decided to keep future investments under a single name while nominating the spouse as nominee.
I must also add that my wife and I have made mutual wills keeping each other as the beneficiary. I was however advised that the Will need not be registered, but would be sufficient if it was witnessed by 2 persons.
Group members may please advise if the advise regarding the above.
Regards, Balaji

[DigitalOne]

Originally Posted by vijaykr

I may have to read up on the process of transferring MFs/demat accounts to nominees after the holder is deceased, but I have heard of significant delays with onerous documentation requirements before the investments are moved to the nominee.

I had a vague notion, without reading up on it, that the MFs would be redeemed and credited to the nominees' ban account. If it means that the investments would be transferred as is to the nominee, it brings a while lot of complications that would necessitate a financial advisor.

Your analysis would be greatly appreciated . .

[V.Narayan]

Originally Posted by DigitalOne

I have a query. Is it legal to operate an account (bank/MF...) when a spouse passes away, without going through the nominee transfer process? The surviving spouse will eventually get to the transfer process by submitting the death certificate, but in case there are transactions after the day of death, do banks create an issue?

If it is a joint bank account of the either or Survivor' category you can operate the bank account after the death of one of the joint holders without an issue. You can inform the bank in your own time. If the account is in a single name then better to wait till the transfer process is over. Most banks are quite co-operative. It is the demat accounts/ mutual funds that make you run around.

Originally Posted by Bsimhan

Narayan sir, this is with reference to point 2 and 1. I have been having all my investments in Joint names till recently. However, I faced an issue in that in case of joint investments, neither can be a nominee in case of death. Now if there is a death, it goes without saying that the survivor would get the proceeds or the investment. However, recently the issue came about that the Account/Mutual Fund does not have a nominee attached to it. I kept getting reminders and daunting emails and therefore decided to keep future investments under a single name while nominating the spouse as nominee.
I must also add that my wife and I have made mutual wills keeping each other as the beneficiary. I was however advised that the Will need not be registered, but would be sufficient if it was witnessed by 2 persons.
Group members may please advise if the advise regarding the above.
Regards, Balaji

Mutual Funds/demat accounts are troublesome and customer unfriendly. Always register your will. Always. the nominee thing I think RBI/SEBI have backed down on.

[dsuman]

I simply invest on my wife's name. This way it becomes easy for her to withdraw if needed. I have also told her about the policies on my name and how to make use of them. My kids are too young to understand all these.

1. Ensure your spouse and kids are nominees. Always ensure the names in the nomination matches their id Proofs.
2. Create investments on spouse's name with kids as nominee. Makes it easy for them.
3. Explain the benefits, claim procedures to them. For e.g. if you have term/life insurance policy, then the insurer must be informed before your body is cremated.
4. Create FDs/Savings in a joint account.
5. Ensure all your and your spouse's and kids documents are in order and show the relationship.
6. Take a family photo (with all your dependants). Will be useful for getting a family member certificate.

[sukhbirST]

Understand rules and laws like class I heirs.
Read differences between nominations for shares, bank ac, lockers, property etc
If buying a property add spouse name in the initial registration itself (later addition means fresh registration cost)
Try to balance out parents, siblings, children, and spouse rights/money needs
Joint and either or survivor are different. As a rule, keep it either or survivor.

[VinsWagen]

While it may seem convenient to store all your important information in a single Excel file or document for your spouse's easy access, it's important to remember that this also makes it easier for a potential fraudster—whether an insider or outsider—to exploit. Simplifying access isn't a complete solution, and we should never assume that fraud won’t happen to us, just as we don’t assume that death is far off.

It's wise to establish a trust circle composed of one or a few reliable individuals who are not part of your immediate household. These could be close friends, such as your schoolmates, or another trusted group who have enough info to help the handover of your assets but not own them as needed. In fact, my school friends and I are actively working on creating a solid process and service among ourselves to ensure our families are protected in this way—something that goes beyond just casual gatherings and celebrations.

Will be looking at the best approaches and ways discussed here to form our strategies too.

And what a wonderful useful thread.

[ShankarG]

Such a relevant threat in the times of uncertainties. Few additional things that I have adhered to:

1. Along with keeping a will, I have shared its copy in a sealed envelope with my sister and my father in law (have made them a witness too).

2. I have added additional provisions including my demise, demise of both spouse and me, and demise of all members and what's to be done with my wealth in that situation.

3. With real estate, I intend to transfer them to my kids in their name (wholly) as they turn 18 so my stress is reduced. It also becomes a tool for me to pass on my wealth while I am hale and hearty and keeping one for missus and me.

4. For my Mutual fund/ lockers, I have told my spouse to redeem everything possible immediately without telling the bank or any institution about the demise. Once done, move everything to her personal account and then make this communication. Lawyers / CAs are there to handle any queries post that or we are ok to pay fine. I don't trust the paperwork process and don't expect my wife to chase different AMCs / institutions.

5. For insurance, my diary includes the name of our broker and call center number of my insurance company.

I am considering hiring a wealth management company in due course of time to handle all this professionally for a fee.

Thanks

[ruskinash]

Originally Posted by ShankarG

4. For my Mutual fund/ lockers, I have told my spouse to redeem everything possible immediately without telling the bank or any institution about the demise. Once done, move everything to her personal account and then make this communication. Lawyers / CAs are there to handle any queries post that or we are ok to pay fine. I don't trust the paperwork process and don't expect my wife to chase different AMCs / institutions.

It's important to consider the tax implications of redeeming a large amount of mutual funds. If your bank account isn't accustomed to handling large transactions, such a redemption could result in your account being flagged and frozen for suspicious activity. The incidence of account freezing has increased recently.

In such cases, as the account holder, you would be required to justify the large sum to the bank. However, if you are not present to do so, and since the transaction was not conducted by you, the banks may complicate the situation. This could potentially lead to legal complications. This process may be eased if it is a joint account operated by either or a survivour. In this situation, your spouse could redeem the funds in smaller amounts and transfer them to her account. This would be recorded as a gift from her spouse, which is not taxable. However, the question remains: what about your taxes during this period? This solution presents a challenge.

[DigitalOne]

Originally Posted by ShankarG

4. For my Mutual fund/ lockers, I have told my spouse to redeem everything possible immediately without telling the bank or any institution about the demise. Once done, move everything to her personal account and then make this communication. Lawyers / CAs are there to handle any queries post that or we are ok to pay fine. I don't trust the paperwork process and don't expect my wife to chase different AMCs / institutions.

As others have written in response to my query above, operating a deceased person's account post his/her demise may be considered as a fraud. Funds could be blocked for a long period of time. This is a risky idea. A easier solution could be to always have a buffer of 6 months expenses in your spouse's bank account (or short-term FD) till the paperwork gets sorted by a professional financial advisor. Prevention better than cure .