Talk to your wife on family’s finances

The untimely death of a loved one is traumatic. Having to manage financial matters while coping with the loss is even more distressing. In most Indian households, it is the male members who manage money and do not want to or think it necessary to involve their wives in the same. It is a well-known fact that widowed women find it very difficult to manage money.

Firstly, most individuals have multiple financial accounts and to figure out these accounts is a big challenge. Women also tend to turn to relatives to help them with money management. This generally does not work out.

A relative may recommend investments based on his investment biases and these investments may not fit well with your risk-taking ability. The bigger issue is that the woman will need to be dependent on someone else for her money management. I am sure that men do not want their families to be troubled when they are no more. Thus it is essential that the couple discusses finances and men especially need to make their partner aware of family finances.  Along with this, here is a checklist of things to be done. Keeping documents in order and electronically: How are important documents like birth certificate, property documents, insurance policies and investment statements being stored? Are they stored in Digi locker or a bank locker or at home? spouse have access to these documents?

Sharing access details: To access most statements, one needs a sign in id and password. Have you shared this with your wife? Are these ids and passwords documented somewhere? Have you made an inventory or list of all your financial accounts, including the name of the bank/institution, account number, type of account, name on the account, and contact information of the person in the financial institution? Financial Accounts would include bank accounts, lockers, employee provident fund/ public provident fund, insurance and investment accounts like mutual funds and of-course loan accounts. Finally, provide contact information for your financial advisor, insurance agent, lawyer, and accountant.  They would have more detailed about your holdings and would be able to guide on the way forward.

Involve spouse in meetings: With your financial advisor, insurance agent, lawyer, and accountant. This will ensure that she is aware of family finances and will not have to start from scratch in case of contingencies.

Update Financial accounts: Check if nominees are mentioned in all your financial accounts. Verify that the information on the accounts like address, the phone number is correct. Further you may want to review your holdings to see if you can make your financial life more peaceful. For example, you could exit smaller investments which do not add much value to the portfolio of insurance policies which are giving very low returns.

Making spouse aware of investments, benefits and debt: Take the spouse through various investments and talk to them about how these need to be handled in case one of the partners is no more. It does sound morbid to do so but better to be safe than sorry. Further keep your spouse informed of benefits from your employer like life insurance, pension, unused leave, stock options. It is also very important to talk about debt repayment plan on loans, especially unsecured loans. The legal heirs of an individual are responsible to pay the loans of a deceased up-to the inherited value of assets. Following this checklist will go a long way in giving your loved ones some peace in an otherwise traumatic time.

Original Source:

Photo Credit: Deccan Herald

Source: Article written by Mrin Agarwal in Deccan Herald

Originally published on: 05 Aug 2019

Original article link: https://www.deccanherald.com/business/family-finance/talk-to-your-wife-on-family-s-finances-752026.html