Tuesday, 22 April 2014

Disaster Management Plan For Prudent Wives (Families)


(Let your husband take care of you and family when alive and even after his unfortunate demise)

It is very unfortunate that world wide, even highly qualified ladies and those in high positions, have little knowledge or interest in financial and property matters. They love to be wholly dependant on their male folks i.e. parents/husband/son etc. Even if someone tries to educate/inform them on these subjects, they shrug them off with the remark - this is a man’s job - why should I worry!

The experience of most Indian women who are confronted with sudden widowhood is sad. The absence of a support system makes the task of the Indian widow an onerous one. This note has been prepared in the hope that every married man will take certain actions, which would considerably mitigate the hardship that his wife (Widow) would have to undergo in the event of his sudden death. Likewise, every married woman should be encouraged to take proactive measures to secure her FUTURE in the contingency of widowhood. In any case, ladies generally live five years longer than their partners.

Preparing for a tragedy is perhaps one of the most important steps in financial planning a wife (in fact anyone) can take.  Thinking ahead to protect yourself and your children in the event of a disaster may be emotionally difficult, but it need not take a great deal of time, and you could someday thank your stars (or husband) for having made the effort.

Step I: Will Power  

You and your spouse should make out separate WILLS and get them registered. In DELHI getting a will registered only costs Rs 600 only. It's a MYTH that people in their late 20s and early 30s are too young to worry about a WILL. Indeed, dependants of this age group suffers most and most of the young victims die intestate, that is, without executing a WILL The absence of a WILL makes the process of recovery for the bereaved family lengthier and more complicated, and may entangle it in court cases.  

It's also a myth that you need to have a substantial amount of money and assets, including immovable property, to make a WILL. If you fail to make your REGISTERED WILL your property will be distributed among your legal heirs in accordance with the personal law applicable to you.  In the case of an intestate (those who fail to make a WILL) Hindu male in India, the legal heirs include his mother, widow and children. Legally speaking, there is no difference between a registered and an unregistered WILL. However, all Offices in India like Municipal Corporation, LIC, Transport Department, Jal Board, Electricity Company, Insurance Company, Bank etc. INISIST ON A REGISTERED WILL. Also, if one goes by experience, there are lesser chances of people going to courts to contest a REGISTERED WILL because it costs lot of money and efforts.

It is essential that a copy of your WILL should be available with your spouse who should be able to easily locate it in the event of your death. It is false that in the case of joint Will of husband-wife, on demise of one of them, property is automatically mutated in the name of surviving spouse. Also, in case there is a joint property/flat, each one MUST write and register their own WILLs at Sub Registrar Office where one lives permanently. 

Step II: Buying Term Insurance for self and husband

Life Insurance is meant to provide the dependants of the policyholder with enough money to replace his income in case he dies. It must take care of the basic expenditure that your family will incur, major expenses like monthly expenses, marriage of children and other liabilities like loans etc. Term Insurance should cover till at least your employment period that is now 65 years. 

Only now, Indians have started going in for TERM INSURANCE. Problem is that though the premium is very low, but like medical and car insurance, there is no pay back at the end of the term of insurance. It lapses. It is the reason very few Indians go for this insurance.

Step III: Collecting Important Records 
Step three in your disaster management plan costs nothing but managing records and time. You and your husband should gather all your important records, a copy of the will and information about where the original will is kept, bank account numbers, safe deposit lockers, insurance policies, Provident Fund and Public Provident Fund details, nominees and the like and keep them in a safe place, but definitely not at your work place.  The following is an illustrative list of important records ladies should have/know when husband is alive.

Immovable property: original PURCHASE DEED of the house or flat; if on Power of Attorney, the original POA; original documents given by DDA/ Housing Agency to the original allottee, allotment letter, payment receipts, particularly of the last payment, possession letter, letter of physical handing over of house/ flat, registered WILL of the original allottee, sale deed, special and general power of attorney, bank Saving Bank and FD numbers, BANK ACCOUNTS IN EITHER OR SURVIOR MODE, Post Office Schemes, NSS, NSCC, cheque books, Bank address, Pension papers, Provident Fund nomination form, PPF pass book with spouse as nominee, Pan Number, Election Card, Passport Numbers with date of issue and renewal date and place from where issued - Note renewal  date Mutual funds , Electricity , Water, Municipal File of property, Medical Insurance  and date of annual renewal , INSURANCE PAPERS, Car documents ,etc. 
Also keep separately copies of property documents duly notarized at other place so that in case original and lost/misplaced, for getting copies of original same from authorities. 

Kindly understand IN details from your husband about above matters. Also, as and when husband goes to such offices for some work, if possible, kindly go with him. It will make your task easier in unfortunate case of your being a widow. In respect of property on rent, the original lease deed and related document should be available. 
[A word of caution – never give your original documents of title of property, Registered Will or their photocopies to anyone.] 

Step IV: Keeping Records updated 
You should update your records and files every month or quarterly so that you are not confronted with unpleasant surprises. If you have opened a bank account, or subscribed to a provident fund, or a life insurance policy before marriage, do remember to change your nominee as your SPOUSE. Ensure that in all your investments, the beneficiary/ nominee is SPOUSE.  

Step V: Identify A Friend In Need 
Write down the name of person(s), who will be helpful to your spouse in her hour of need because children would leave for their destinations after fourth day. 

Step VI: Responsibility of Husband
It is the responsibility of every husband to make his WIFE financially educated meaning thereby that she has as the ability to make informed judgment and take effective action regarding MANAGEMENT OF MONEY across the entire cycle of SAVING, SPENDING, INVESTING, BUDGETING, PROPERTY BUYING, etc. 

The motivation behind disaster management planning is the desire to help the surviving partner cope with the loss and go on with the business of living.

Narendra Ahuja
MA LLB PG DIP Manchester
Will & Mutation Adviser, Advocate

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