What happens to my money when I die?
Hello doston, Angel One ke ek auur super-informative podcast mein aapka swagat hai.
Doston, aaj hum ek sensitive yet extremely important topic pe baat karenge which is of enormous consequence for you and your family members.
Today we will talk about what happens to your money and your investments once you are no more.
Maanta hu, it is not a topic which anyone would want to talk about willingly but securing the same standard of life for your family after your passing is an important part of financial planning. It is also one way of leaving behind fond memories for our loved ones and letting them know that we care, even if we might not be there with them. What’s more, in the age of the pandemic talking and preparing for such an eventuality is ensuring that your family is not left to whims and fancies of fate or other family members.
Ok, without further ado, let’s dig in.
On the death of a person, his or her assets are distributed to the successors or those named in his or her will. In case, a person has died without creating a will, he or she is said to die intestate.
If you are a Hindu, in that case, your investments will be passed on according to the Hindu Succession Act, 1956. In case, you are a Muslim, your succession will be determined by Muslim Personal Law.
This is where it is important to point out the importance of drafting a will. In India, a Will must be made in accordance with the Hindu Succession Act or the Indian Succession Act.
Yeh zaroori hai ke the Will must be signed by you and two other witnesses. Yeh zaroori nahi ke the Will must be registered, however, registration can boost the validity of the will in the eyes of the law.
As a rule, the Will requires the appointment of one person who is to be an executor of the Will, which is to say, that he is responsible for executing all the formalities and ensure that assets of the person are passed on correctly to those named in the Will.
Aaiye doston, ab aage badhte hai to the issue of the nominee.
As per Indian laws, a nominee is supposed to be a caretaker. Ek nominee legal heir bhi ho sakta hai par yeh zaroori nahi ke har nominee legal heir hi hona chahiye.
In case the nominee is not a legal heir, it is his responsibility to hold your investments in trust for a minor legal heir and to not misappropriate it or mismanage for his own selfish motives. Agar ek nominee appointed hai, in that case, aapke family members ko authorities ko sirf ek death certificate dena padega. In some case, the authorities might also ask for a letter of indemnity. In case, there is no nomination, your family members will have to secure a succession letter from the local tehsildar.
Doston, ab baat karte hai stocks and shares ki. Aapke jaane ke baad, all your shares
can be transferred to your nominee. All your nominee has to do is submit a death certificate which has been attested by a notary or a gazetted officer. Agar aapne apne brokerage house ke saath, aapka nominee nahi register karaya hoga toh yaad se aaj hi nominee register karaye.
Nomination registered na hone pe, your legal heirs will be inconvenienced and they will have to submit either probate of Will, succession certificate or a letter of administration to prove that they are indeed your legal heirs.
Ab baat karte hai mutual funds ki. Your mutual fund holdings are passed on to your nominees by a process called transmission. Please ensure today that a valid nomination has been registered in your mutual funds
. After your passing, your legal heirs will be required to write a letter requesting transfer of the mutual fund units. They will also have to submit a copy of the death certificate, bank account details of the person to whom the mutual fund units are to be transferred and a KYC confirmation letter.
Agar koi nominee nahi registered hoga toh your legal heirs will be forced to go through more inconvenience and produce a succession certificate before acquiring them.
In the case of Gold, it can be easily passed on through a will. If there is no Will, then one will need a succession certificate. Electronic gold can be passed on following the same procedure as shares.
In case of your real estate holdings, a will is necessary for passing on the property holdings to your legal heirs. Your legal heirs will have to make an application to the local municipal authority or talathi to change the land records so that the name of your legal heir is reflected in the records.
In case of PPF, your funds will pass on to your legal heirs who are required to fill and submit Form G. In case there is a nomination, then your legal heirs will not be required to submit a succession certificate. However agar app nomination dalna bhool jaate hai then your legal heirs will have to secure a succession certificate for the funds to be transferred.
Lastly, in the case of life insurance, aapke jaane ke baad, your nominees will receive the sum assured. As an example, consider kariye ke aapne life insurance karaya hai jisme sum assured hai Rs 1 crore. After your passing, your family members will be financially protected and they will receive a sum of Rs 1 crore.
Doston, I hope aaj aapne iss podcast se kucch important baatein samjhi hogi. One of the most important point being the creation of a Will and registering the name of nominees in your financial instruments. Yeh karna bahut hi zaruri hai so that aapke jaane ke baad, your family members are not forced to run from pillar to post trying to get one document or another.
Jaane se pehle ek auur important baat. This podcast has been made for educational purposes only and the investor must do his own research as well.
Aise aur interesting podcasts sunne ke liye humein follow karein via youtube and other social media channels. Until then goodbye and happy investing!