The Important Thing We Never Plan For

Satish Joshi

Last time I wrote about planning for retirement, and why it is critical that we look upon a retirement plan NOT as a “saving for retirement” plan but a “spending after retirement” plan. Because while we are professionally active even if we indulge in unplanned, impulsive spending (not something that one should make a habit of but even if we do so occasionally), we still have the capacity to generate extra money to cover up any possible dents, that such unplanned expenditure may cause in our lives. But after retirement, unplanned spending can potentially impact our wellbeing quite seriously. So, it is prudent to plan for our expected post retirement expenditure beforehand, as much as one can.

On the other hand, if we have planned for our retirement prudently, then in all probability by the time we leave this world, we will not have consumed ALL the assets we had set aside to support us post retirement. Some things will be left over.

The question therefore is, have you planned for your death? Have you planned what happens to your left-over assets after you die?

And whether you have made a will, is not the only question I am asking. That is the easier part of the planning for death. All you need is a lawyer who will have a ready template in which you fill your details and your desired distribution of what is going to be left-over, sign it, get two friends to witness it and you are done. Perhaps you can get it registered if you like. But what I am asking is something more than just that will. To be sure, easy as it is to do so, a lot of people I know haven’t taken even that first step of making a will!

Planning for death is considered a morbid, even inauspicious thought. While intellectually we all accept that we will all die one day, emotionally we continue to hope that that day will never come and that just thinking about it will in fact bring it closer.

If you are in my age group or even a decade younger, you most likely have financially independent children who are leading their independent lives. If you are a decade younger than even that (i.e 2 decades younger than me) you are likely to have financially independent living parents. So, what I am really talking about is a problem that spans 3 generations!

The question I am asking is – Even when you have made a will, have you and your children considered what difficulties your children will face to take possession of your left-over assets which you have willed them to have? Or conversely, even if your parents have made a will, have they or you considered what difficulties you will encounter to take possession of their left-over assets which they want you to have?

I have a close friend who has been living in the US for the past 3 decades or more. About 8-9 months ago, his father who was living in India alone (his mother had died a couple of years earlier) passed away. My friend had been pestering his father to come and live with him in the US for the past several years, but his father didn’t want to go! So, my friend had created a fund in India which generated sufficient income (even though his father was financially self-sufficient) for his father to live comfortably and pay for a 24 x 7 caretaker and so on.

When my friend came to India to perform the last rites and to wind up his father’s affairs, he found a stack of disorganized papers related to bank accounts, fixed deposits, some other investments including what looked like some land outside Pune that his father had bought 50 or 60 years ago!

He had no idea about even the number of bank accounts his father had! There was a key with a bank’s name on it, so presumably there was a locker somewhere that his father had acquired. Since there was a locker, it presumably contained some valuables but no information about what that might be. There were some printed share certificates, with no clue about whether his father had ever demated them. If yes, where was the demat account? And whether some of those companies even existed today? Even for the bank accounts which he guessed his father must have had, looking at the debit cards and credit cards he found in his father’s cupboard, he didn’t know the passwords or PINs to access them. He didn’t even know how to unlock his father’s mobile phone to check if there were any bank or related apps which could have given him some clues about his father’s financial affairs!

His father had fortunately made a will which listed some investments, a set of gold ornaments (which is what that locker must have contained because they were not in the house), address of that land in Pune (but the title deed was nowhere to be found) etc. But no mention of bank accounts, or FDs (which he may have acquired after the will was made), or a PPF account which he must have had etc. The flat where his father lived was in his father’s name and in the housing society’s registers the named nominee was his mother! After his mother’s death, neither the society nor his father had bothered to update it!

My friend didn’t need his father’s money. He is doing well enough in his own life. But he didn’t want it all to just go to waste or fall into the wrong hands, rightfully so. He finally gave most of it away to various charities in his father’s name. BUT it turned out to be a nightmare to sort through all this and took a considerable amount of effort, time, and expense until everything got transferred to my friend (Even now he isn’t sure that everything his father owned was really accounted for!).

And before you ask, this whole chaos was not because of any apathy on the part of my friend. I know from first-hand experience, that he was a very caring, devoted son, he was constantly in touch with his father all along.

It is just that neither the father nor the son ever thought it necessary or expeditious to discuss the father’s financial affairs and at least create some kind of an action plan about what to do after the father passes away. Listing what you possess in a will and who shall inherit what, is one thing, ensuring smooth transmission of what you may leave behind requires a lot more to be done. And in the modern, connected world, that has only become more complicated. So much of our financial affairs happen on-line with little or no paper trail which our inheritors can “stumble upon” in the cupboards of the deceased.

Just as an example, despite my having made a will and listed everything I own today, when I go, unless my son knows how to access my online footprint, he will have a hard time figuring out what exactly I have, say, in my PPF account? Or what final pay out to expect from my annuity policy after my death!

I am willing to bet that nobody, not just this particular pair of father and son, will have the courage to say to either their parents (or to their children – as the case may be) “Come on, let’s spend some quality time to plan for your (or my) death.”

But we must!