How to handle finances after the death of a loved one

Your skills in finance management become especially important after the death of a loved one. Even through the painful moments, you must be resolute enough to handle pressing financial decisions when a loved one dies. Here are a few points you need to address.

1. Death certificate:
 

A death certificate is the first thing to obtain after the death of your kin. A few facts you should know about death registration are:

1. The death of a person must be registered with concerned authorities within 21 days of its occurrence.
2. A death certificate or its copy, with the correct name of the deceased, is required for various official purposes.
3. It is better to obtain multiple copies of the death certificate from the authorities.

2. Will and Succession Plan:

The presence of a will and succession plan will make posthumous finance management much easier. If you are handling the finances of your deceased loved one, see if the person had registered a will.

1. Assets can be transferred as per the nominees mentioned in the will. 
2. In case of conflicts between nominees, the wishes of the deceased person, as mentioned in the will, take precedence.
3. If there are no wills and elected nominees, a succession certificate must be obtained from the district court for the distribution of movable assets. 
4. Immovable properties are allotted to the legal heir(s). An heir can waive his or her right to inheritance through a signed release deed.

If the deceased was a businessperson, the financial decision involves the use or creation of a succession plan. It ensures that the business continues uninterrupted and without dispute or confusion. It will identify the key positions in the business and nominate the right persons as deemed fit by the deceased.

3. Informing about the death:

There are various institutions that need to get the news of the death. This includes banks, insurance companies, telephone service providers, and credit card companies. 

• While Aadhaar doesn’t get deactivated upon death, the biometric credentials can be locked through the Aadhaar app or website to avoid misuse.
• The PAN of the deceased person must be surrendered to the Income Tax department after the closure of all income tax formalities, including the last income tax return.
• Voter ID must be cancelled by the legal heir at the local election office. 
• A passport becomes invalid at the end of the validity date, while a driving license can be cancelled by visiting the concerned RTO.

4. Banking modifications:

When a bank customer passes away, the bank must be informed of the same. Metra Trust Privilege Banking customers can get in touch with their private banker and/or relationship manager to be guided by them as financial advisors through the process.

Various Scenarios

• In case the deceased person had named a nominee for the bank account, the nominee will receive the balance amount.
• If the account was a joint account, the surviving account holder can continue with the account after removing the deceased person’s name or withdraw the balance. The surviving account holder must furnish a death certificate and identity proof to take any further action. 
• Certain joint accounts cannot be operated if either of the account holders dies. In such a case, the balance is paid to the surviving account holder and the legal heir of the deceased person. 
• In the absence of a joint account holder or a nominee, the bank balance is paid to the legal heirs and survivors of the deceased jointly. 
• If you are expecting any income to be transferred to the deceased person’s account, wait till the same is transferred before closing the bank account.

5. Insurance:

After the passing of your loved one, you will have to browse through the records and check if the deceased had a life insurance policy. 

Process to Follow

• You must inform the insurer about the death of the policyholder at the earliest. 
• You will be filling out a claim form which will mention the policy number, name of the policyholder, name of the claimant, date and place of death, etc. 
• You will then submit the claim form along with the required documents. These may include a death certificate, original policy copy, date of birth proof of the deceased, etc. Survivors of Metra Trust customers can read the Deceased Holders and Missing Person - Settlement Scenarios and Claim Application for all relevant information.
• The deceased person’s name must be removed from any family health insurance of which he or she was a member.

6. Investments:

You should inventory all the investments the deceased person had made or was maintaining. 

• Investments where the deceased had mentioned a nominee can be easily withdrawn in favour of the nominated person. 
• In the absence of a nominee, the legal heir and surviving family members have to apply for the withdrawal of the investments. 
• In all cases, the claimant must provide a death certificate, identity proof, and other documents as specified by the financial institution.

Regular investments like an SIP or a recurring deposit should be paused after intimating the bank or financial institutions about the death of the investor. If multiple mutual funds are maintained, informing the Register and Transfer Agents can ensure the closure of all such funds. 

7. Liabilities:

Addressing the liabilities is something that will need more meticulous finance management. Here are a few points that may help you handle your loved one’s liabilities:

• One of the first things that you must do is pay off and deactivate the deceased person’s credit card. It is a high-interest liability that should be addressed early. 
• Any active loan should be timely repaid or transferred, including the timely payment of the home loan and car loan EMIs. 
• If you plan to continue paying the remaining home loan EMIs, you can opt for Metra Trust’s FASTTRACK balance transfer facility. It offers attractive interest rates and additional top-up facilities.
• As a part of astute finance management, any billable subscriptions or services availed of by the deceased person should be deactivated if no longer required.
• If creditors demand debt repayment, the liability of the legal heirs is limited to the value of inherited financial assets and the estate of the deceased person only. 

8. Assets:

It is easy to identify and take care of the assets that are right in front of your eyes. However, keep in mind, for instance, the title deed of a plot of land owned in a distant town.

• The ownership documents for such assets should be collected and maintained safely in one place. Chances are that your loved one may have already filed them neatly.
• You also need to transfer these properties to the legal heir’s name. A letter of authority, a will, or a succession certificate is required to transfer a vehicle and even house property.

Summary

Metra Trust ensures that its customers are well-informed  when it comes to  their legacy settlement and succession planning for a better finance management. The  FIRST Private program offers expert financial advice on legacy and inheritance planning so that customers can streamline their posthumous finance management in their lifetime.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Metra Trust or its affiliates to any licensing or registration requirements. Metra Trust shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.