Once every 4 to 5 years, I write down the details of my back accounts, insurance etc., and send it to the people who will be involved in managing our financial affairs in case something happens to me and my wife. I did this again recently, but this time, I got a phone call from my worried sister checking if everything was ok with us. I sent this information to her earlier as well, but I guess, Covid may have made us a bit more sensitive to any communication like this, as we all know people who faced challenges due to Covid.
So, coming to the reason I am writing this is now, is, I have assisted a couple of families in settling their financial affairs after some adverse events. In my experience, the information required to assist in settling the financial affairs was not available and made the settlement process a lot more tedious. Even after quite a bit of effort, we are not sure if all the assets are addressed.
Many people are not comfortable making a financial inventory for various reasons, some don’t want to contemplate something bad can happen to them, some think making an inventory could be an invitation for bad luck, some want to do it but are never able to find time to do it, some don’t know who to send it to and so don’t see a point in writing it down, some don’t know what the inventory should be so they don’t have one. This article hopes to assist this last category of people.
The inventory should ideally have the information needed to identify where to look but not necessarily reveal what will be found (as this information can change and it is also not required at the point of sending it).
Here is a quick list of things
- Bank Details: The bank name/s and account number/s (doesn’t need to have the amount as this will change)
- Brokerage account details: Brokerage name/s and the account number/s
- Insurance details: – Insurance company name/s and the policy number/s
- Bank locker details: Bank/s at which one has a locker and the locker number/s (the contents of the locker can be documented and kept somewhere else.)
- Property details: Can list out the properties or can mention the place (ideally a bank locker) where the registration documents of properties are kept.
Remember that the list doesn’t have to be complete in the first go. The initial goal should be to have a list with the key stuff. A list of the top few items representing about 80% of the wealth is a good enough starting point. Consider updating this every few years or when there is a material change.
One thing the pandemic has taught all of us is that bad things (, like accidents, natural disasters etc.,) can happen quite suddenly. It is important to take precautions and hope for the best, but it is prudent to make sure that in case of an adverse event there is enough information available to the well-wishers, for them to help.
We need to remember that the people who are going to help us after an adverse event are usually those who are close to us and hence, may not be in the best emotional state to spin their wheels looking for information. They too have busy lives and may not enough much mental energy and time. Lastly, and most importantly this should be done because we care for our dependents and want to make it easy for our well-wishers to help them in the time of adversity.
We may not be able to prevent adverse events but can plan for them. I hope this blog nudges people who did not make an inventory to do so.
Signing off with the hope that we have seen the end of pandemic and wishing everybody the very best.