In India, numerous families face challenges accessing their accumulated savings due to a lack of information on their whereabouts. Abandoned bank deposits, forgotten mutual funds, and unclaimed insurance payouts collectively represent a substantial amount of unutilized wealth.
Abhishek Kumar, a Sebi-registered investment adviser and the founder of Sahaj Money, recently highlighted on LinkedIn the issue of approximately Rs 80,000 crores lying unclaimed. He emphasized the importance of open communication, proper documentation, and family awareness in addressing this issue.
Kumar emphasized the significance of ensuring that family members are informed about the assets one owns to prevent situations where funds remain inaccessible. He shared instances where individuals discovered significant funds only after thorough portfolio documentation was conducted.
Moreover, he stressed that having a will alone is insufficient and must be supported by proper evidence and procedures to avoid complications. Kumar recommended taking essential steps such as obtaining a medical certificate on the same day of will creation, video recording the signing process, and registering the will to ensure its validity.
Many families remain unaware of the existence of various assets, even if they are securely invested. Kumar pointed out the necessity of maintaining an updated record of all assets in a single location for easy access by heirs.
Contrary to common belief, having a nomination is crucial as it expedites the process of accessing funds for beneficiaries. Kumar highlighted the importance of updating nominations for all bank accounts, investments, and insurance policies to facilitate quicker access to inheritances.
Avoiding discussions about finances within families could lead to significant challenges in the future. Kumar urged individuals to have open conversations with their families, sharing account details, investment information, and reasons behind financial decisions to avoid confusion or disputes later on.
Lastly, Kumar emphasized the importance of appointing an executor for the will, underscoring the need for a responsible and accessible individual to ensure the proper execution of one’s intentions. Planning and organizing the transfer of savings to loved ones is crucial to prevent emotional stress, delays, disputes, and loss of legacy.
In summary, while accumulating savings is important, establishing a systematic approach to transfer assets smoothly to beneficiaries is equally essential to avoid potential complications and ensure a seamless transition of wealth to future generations.