Succession Plan made Simple

Recently, the news catch my attention that Mr. Mukesh Dhirubhai Ambani, Son of the Late. Dhirubhai Ambani has made a succession plan for himself at the age of 65 years. According to?Forbes?and?Bloomberg Billionaires Index, Ambani's net worth is estimated at US$95.7 billion (or INR 792.54 Crores) as of 6 September 2022, making him the second richest person in?Asia?after?Gautam Adani?and the 8th richest in the world.

As an individual, we are not as rich as Mukeshbhai, but yes, we too have a family, small assets, which we have built for the next generation.

Do you know, Property and family dispute litigations in India in 2016 accounted for 76% according to TOI news article. To find the root cause, I self research and found that there was no proper succession planning done for the family. Infact, in most of the cases, their loved once, don't even knew about the assets and insurances policies were created, but due to no guidance, their loved onces, did not have access to such assets/insurance policies.

Today, I am sharing with you a simple guidance note (Part I) for Succession Plan and points to be kept in mind while preparing the Succession Plan for yourself.

1. Preserve the following documents carefully:

1.1. Details of Bank Lockers, key numbers and upkeep of keys

1.2. Details of Bank Accounts and other investments

1.3. Proper upkeep of Cheque Books, Share Certificates, Demat Account, Life Insurance Policies, Health Policies along with ID Cards, Pension Papers, Recoverable and Payable money from / to friends and relatives, Title deeds of property, General Power of Attorney if given to anyone, Original WILL (Execute if not already done) etc.

2. Password-Safe Upkeep

2.1. Proper and safe upkeep of password of email ID, ATM, and Credit Cards, Bank accounts, onlie profiles, net banking, life insurance, vehicle insurance, Demat Trading accounts, Income Tax e-filling etc.

2.2. Phone Number and contact person name of bank, insurance co., Investment consultants etc.

2.3. It can be in hard copy or can be digitally stored with a safe access known to next of kin.

3. Ensure Nomination

3.1. Ensure Nomination in all investment accounts, lockers, Insurance Policies and Digital Assets.

3.2. As far as possible all the investments be in joint names of self and spouse with nomination registered in every account.

3.3. Ensure documentary evidence for registered nomination.

3.4. One can cancel and re-register the nomination during the currency of investment.

4. Nomination for Social Media Accounts

4.1. In the digital era the new concept of keeping online Social Profiles, email ID's, Facebook data secure, and nominations is gathering momentum and even Google has introduced the Inactive accounts manager so as to enable nominated persons to access your Digital Assets, Email ID's and Social Profiles.

5. Execute WILL wherever needed

5.1. Nomination does not give legal right to nominee and legal heirs can claim money from the nominee. To ensure that your wishes are fulfilled after your death - one must execute registered / unregistered will.

6. Prepare a Family must Know-Register

6.1. It is better to maintain a register either as a soft copy or hard copy containing the following important particulars.

6.2. This is only illustrative and one can improve add or modify depending upon the need and convenience :

a. Contact number of close relatives / friends

b. Contact number of Doctors / Hospitals, Laboratories

c. Contact number of Investments, Tax Consultants

d. Details of Investments

e. Details of assets including movable / immovable properties.

f. Details of life insurance policies.

g. Details of Health Insurance Policies and General Insurance Policies

h. Details of Lockers

i. Details like Aadhar Card, PAN Card, Voter's ID, Driving licence and Passport etc.

j. Liabilities if any and amount if any due to be paid or received with details.

7. Train the Next of KIN/SPOUSE and prepare a Guidance Note

7.1. You may also train or counsel your legal heirs to the procedures for making the claim for bank accounts, how to claim family pension etc.

7.2. In case of emergency hospitalization what should be done for availing cash less facility etc.

7.3. The facilities, benefits available in case of unfortunate death like claim of funeral expenses, benefit of family pension, health insurance coverage should be documented and informed.

7.4. If possible, prepare a Note, a Guidance as how the assets you left behind to be handled by your next Kin or legal heirs.

7.5. You can share your thoughts and inputs as how best they can be handled / shared / used.

7.6. Also, you can mention the name / contact number of your friend / well-wisher / auditor / Legal consel or a Reliable person from whom the next of kin or heirs can seek opinion on guidance in case of need.

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