INTRODUCTION TO FINANCIAL PLANNING

There will be no financial stress as long as we are employed. But the fact is that someday we have to retire from service. Then our income will be reduced to half, or in case of some there may not be any income. At this stage there will be financial requirements and health problems. So, for leading happy, comfortable and peaceful retired life we have to PLAN for the LIFE

AFTER RETIREMENT .

The essence of life is not just to stay healthy, but to stay wealthy too. Keeping in view of the growing importance of managing one’s own finances in order to secure the future of self, dependents and to brace up for the uncertain and ever-changing world, we intend to create awareness of the art of financial planning and its nuances through a series of articles through the periodical newsletters.

Over the years, India has seen a rapid change in the family structure. From a joint family system, it has transformed mainly into a nuclear family structure. Which means, instead of being taken care of by children, a retired individual has to self-finance the sun-set years. With the improvement in medical science, the probability of living longer is higher, which calls for building a larger retirement corpus.

This also calls for changes in investment pattern and other lifestyle-related issues for every retired person. For one, “It’s never too early to be setting aside money for your retirement, the better off you will be. The longer you wait, the more sacrifices you will have to make to catch up. That’s better when you remain invested for a longer duration.

WHAT IS FINANCIAL PLANNING?

Financial planning is the process of assessing the current financial position of the individual, setting the financial goals at different stages of life cycle and act in order to achieve those goals.

HOW IT WILL BE BENEFIT YOU...?

Financial planning seems like an obvious task for everyone to do, but how many people do you know like to have a budget to stick by every month, balance their investments every half year, and make sure to take advantage of all available tax deductions every year? Unfortunately, not many people enjoy doing these things.

However, doing financial planning can achieve more wealth for yourself, protect your family from any financial disasters, and give a peace of mind that everything will be alright financially.

BE CAREFUL IN SELECTING THE SCHEMES.

Hence, we have to search out for the schemes where there is no TDS. There are certain Long Term investment Schemes where there is no Tax on the income earned.

Don’t keep all eggs in one basket

WRITE YOUR“WILL”

What is A Will?

Will is a document which divides and transfers property after one’s death, to the people or institutions chosen in the document. It is generally made to distribute the property and assets of the person. A will can also be made in case where there are children (minor), and the question of their guardianship comes up.

A Will is a document, considered as a legal declaration of the intention of a Testator about the distribution / disposal of his possessions / assets / properties etc. after his death. The Will would specifically have details of all considerations that the Testator has in mind, to carry out his wish in this regard, after his death.

Who can write a Will?

• A person who has assets and desire those assets to be inherited by certain specific persons, can write a will.
• He / She should be a Major i.e., 18 years of age or more.
• Should have a sound disposing mind; & should not otherwise be debarred from making a Will by any competent authority.

What is meant by Probate of a will?

• It is the certified copy will under the seal of competent court allowing the administration of the estate of the maker.
• According to Section 2 of the Indian Succession Act, 1925, Probate means "the copy of a Will certified under the seal of a court of competent jurisdiction with a grant of administration of the estate of the testator".
• It is nothing but a decree passed by a competent court declaring the legality/correctness and genuineness of the Will of the deceased The legal process that takes place after a person has died, to pay his lawful creditors and to transfer his assets to his beneficiaries is called probate. Generally, a probate is advisable in all cases and is necessary in cases of will dealing with immovable property.

Is probate of will mandatory?

• A probate is mandatory when a Will is made in the State of West Bengal, Bihar, Orissa, Assam, NCR of Delhi and municipal limits of metro cities of Chennai and Mumbai, respectively. Wills that are made outside these territories but where the property is situated in these territories but where the property is situated in these territories also require a probate. Under Section 212(2) of the Indian Succession Act, 1925, Hindus, Muslims, etc. are not bound to apply for letters of administration (Probate). It is optional and not mandatory for these persons to seek probate of the Will.
• So, unless covered by any of the above cases, a probate of a Will is not mandatory. However, there is no restriction in law to get a probate of a Will, even if it is not mandatory. Obtaining a probate is advisable, in cases where there is a probability of the validity of the Will being contested in future on any ground. A probate, though it takes time to obtain and may cost a tiny percentage of the inheritance (court multiple assets to handle, and those immovable properties are present in various states. Also, a probate, a completely fool-proof way of the handling high-value properties.

Is it necessary to Register the Will? Is unregistered will valid?

All wills need not be registered. Registration of a will simply means that the maker of the will and the witnesses have appeared before the registering authorities and that their identity has been verified. Registration of instruments is governed by the Registration Act, 1908. Under this Act, a will is not needed to be registered, and an unregistered will is also valid.

Though Registration of a Will is not mandatory, it is advisable to register the Will at the Sub Registrar office to add to its authenticity. There is no stamp duty payable on Registration of the Will. However, applicable registration charges have to be paid Both registered and unregistered will can be probated.

When and how to get the will probated?

The probates are granted to the executor or executors (in succession, in case more than one is named), by the High Court, with a copy of the will attached. One can apply for a probate after seven days of the death of the Testator. (Or the person who makes the will and also the owner of the property to be distributed). The application for probate, need to make with the help of a lawyer or an advocate, to the High Court, under whose jurisdiction the property might fall.

What are the characteristics of a Will and its requirements?

The Will document should have:

• All necessary identifiers of the Testator should be mentioned in the Will. This includes but not limited to Name, Age, Religion, Address etc.
• A declaration made by Testator to the effect that the present Will is his/her last Will and all other earlier Wills and Codicils are hereby revoked.
• Clear information about who are the beneficiaries and what is their relationship with the Testator as well as what assets will be given in what proportion to which beneficiary.
• Specific special clauses which will make a specific beneficiary eligible or non-eligible to inherit the share of the assets of the person (Testator) and conditions, qualifications for the same.
• Mention about the Will to take effect after the death of the Testator and if necessary, also mention about who will be responsible for the
• A Will must be attested by minimum two persons as witnesses who shall put their signatures in presence of the Testator
• And the Testator should sign the Will in the presence of the witnesses. Beneficiaries cannot be the witness.
• Will can be modified or altered at any time and any number of times by the Testator during his lifetime.
• Will is revocable during the lifetime of the Testator. As long as a Testator is living, he may, at any moment, cancel his Will and make a totally different disposition of his

Who are the parties to a Will?

• Testator is the person who declares his wish in the Will regarding the disposal of his properties after his demise.
• Executor/s is/are appointed by the Testator, to ensure that the assets are distributed as desired by him/her in the Will. (Optional)
• Beneficiary/ies is / are the person/s to whom the benefits are passed through the Will.
• Witnesses–Two persons.

Who can be a witness to the Will?

Witness to the Will can be anyone who is/ are above 18 years of age and of sound mind and capable to enter into a Contract. It is recommended that the beneficiary/ies should not be the witness to the Will.

How many witnesses are required?

There should be minimum Two witnesses to the Will.

What all assets can be covered under the Will?

All movable as well as immovable assets including Real Estate, Fixed Deposits, Money in Bank Account(s) Securities, Bonds, proceedings of Insurance Policies, Retirement benefits, Art, precious metals (Gold, Silver etc.), Brands, Goodwill, digital assets (photographs, sketches, blogs, websites, email accounts such as Gmail, yahoo etc. and with social websites such as Facebook, Twitter etc.) and Intellectual Property Rights etc. including what they are and the method and manner of their storage, can be covered under the Will. In short, any assets that the Testator has in his ownership, at the time of his death can be included and distributed as per the desire of the person.

Who all can be included as beneficiaries to the Will?

All the Testator’s loved ones who may include the testator’s spouse,children,step-children,parents, grandparents, grandchildren, friends, relatives and /or any institution like School/s, Temple/s, Community Trust/s, Charitable Trust/s, etc. to whom the Testator wishes to pass on any benefit can be included as the beneficiary/ies in the Will document.

Do I need to sign my Will in front of the doctor?

No. However, it is advised that you attach a fitness certificate from your family doctor along with the Will attesting the soundness of mind.

Is Will required to be printed on a stamp paper?

No; the Will can be written on plain paper of any convenient size. It is also not necessary that Will has to be written on legal size paper. In addition, the Will can be handwritten and is not necessary to be in typed form. However, for clear legibility and avoid any ambiguity arising due to handwriting, typing in a font size which is naturally readable, is recommended.

Can the Testator bequeath/mention the ancestral Immovable Properties (Assets) situated in India?

The Testator should not bequeath/mention any ancestral property/assets not owned by him unless such property or a share in such property has devolved upon him / come to his possession legally by following due process of law.

Can the Testator bequeath /mention the Immovable Properties (Assets) situated outside India?

No, Testator cannot bequeath/mention the details of the Immovable properties (assets) held outside India. The properties held and owned outside India are governed by the laws of that country where the property is situated and hence, it is advisable to prepare a separate Will for the assets held outside India in accordance with the laws applicable in that country

Who can be appointed as an Executor to a Will?

Anyone who is / are above 18 years of age and of sound mind and capable to enter into a Contract, can be appointed as an Executor/s to the Will.One can appoint multiple Executors, one as a primary executor and others as alternate executors.The Testator has the option to appoint any of his relatives or friends as Executor and mention it in the Will Document.If the Testator chooses to appoint a professional agency as an Executor, these services are separately availed and paid for as per the terms of the agency who is appointed as an Executor. Executor is appointed in will. To act as Executor, will has to be probated.If a person dies intestate or there is no Executor appointed in will, Court will grant letter of Administration, to deal with the estate of the deceased.

Common Terms associated with the Will writing process Intestate:

A person who dies without leaving a “Will” i personal law of the deceased, all his legal heirs, are entitled to the assets of the deceased.

Testator:

A person who makes and executes a Will is called the Testator

Will / Testament:

A written statement of Testator’s wishes prov his/her demise.

Beneficiary:

A person, who is entitled to the asset under a “Will” is called a beneficiary. Any person can be a beneficiary, including aCharitable organization or even a public or a private Trust.

Minor:

• any person, subject to the Indian Majority Act (Section 9), 1875 who has not attained his majority within the meaning of that Act, and any other person who has not completed the age of eighteen years;
• a person who person or property, or both, a guardian under the Code of Civil Procedure, 1908 has been declared or appointed, then he shall be deemed to have attained his majority on completion of his age of 21 years and not before;
• and “minority” means the status of any such person.

Attestation of / attesting a Will:

Attestation means signing a document for the purpose of testifying the signature of the Testator

Executor:

A person, who is appointed to look after, administrate and distribute the assets of the Testator, upon his demise, is called an Executor.

Probate:

It is a process to establish that a “Will” is valid. It is unders Court, certifying the “Will” as valid.

Letter of Administration:

A letter of administration is an order granted by the Court to a person appointed to settle deceased persons affairs in accordance with a Will where the Testator has failed to appoint an Executor under a Will or where the Executor is appointed under a Will refuses to act or has died before or after proving the Will but before administration of the estate or in case of intestacy.

Codicil:

A codicil is a document that is executed by a person who had previously made his or her Will, to modify, delete, qualify, or revoke provisions contained in it.A Codicil is a part of the existing Will similar to an addendum but is not a new Will.

Succession Certificate:

An Order issued by an Hon’ble Court certifying the person(s) entitled to the estate of a deceased person and extent thereof.

Check List for Legal heirs

After the initial shock of sudden loss of the family member and after the grief period the legal heirs have to accept the reality and should move forward to fulfil the desire of the deceased duly upholding the cherished values of the deceased. Though it may look unpleasant or little bit awkward to discuss financial issues, it is better to realize that certain things cannot be postponed forever. Also, it will be difficult to get the assembly of legal heirs or other stake holders to discuss, sort out and execute certain documents. The important to do list is as follows

1. If the spouse of the deceased is alive, it is the first and foremost duty of the Son/Daughter, Children to give comfort and assurance that they will stand by the parent to take care of their interest
2. At any cost, please avoid confrontation or discussion as who has to look after the parent in the changed circumstances.
3. Try to sort out financial issues amicably.
4. Get the death certificate of the deceased. Check the name, age and other particulars are correct, try to incorporate Aadhaar number in death certificate if possible. Also, it is better to get the correct cause of death mentioned in the death certificate. This is important in case of Serving employees who died due to Covid 19. Front line Workers and employees of certain organizations can get insurance benefits and other special compensation, if the death is due to pandemic illness. Get as many copies of Death Certificates (original) depending upon the need, the number of legal heirs, Investments in the name of the deceased.
5. If the parent is capable of handling financial issues, just support him/her to deal with the financial assets left by the deceased.
6. In case both parents are not alive, entrust the task of gathering information of financial assets and other documents either to the elder in the family or the heir who is living in the place of deceased and capable of getting things done.
7. If there is any Will and it needs to be probated take the help of a legal counsel.
8. Take action to get the legal heirship Certificate.
9. If there is Vehicle in the name of the deceased-it requires priority in action. Inform Concerned RTO about the death of the vehicle owner.
10. Inform the Ex-employer of the deceased.
11. Certain organizations reimburse funeral expenses. Check and comply with the requirements.
12. Inform the Banks where the deceased was having account. If the deceased took Group Life Insurance linked to Bank account, check and claim the same with in the stipulated period.
13. In case of accidental death, check and Bank account linked group accidental death cover is available.
14. Also, for accidental deaths, Cover is available in Certain debit and credit cards. Check and apply for the same.
15. For death occurred due to accident on road or involving Motor Vehicles, make claim under Motor Vehicles Amendment Act. (2019)
16. Check the number of insurance policies of the deceased and take action to claim the policy benefits under each policy. Check for any annuity policy and claim pension benefits on that. Inform the Insurance Companies about the death of the policy holder.
17. If the spouse is eligible for family pension apply for the same.
18. Have a discussion and plan as how to apportion the assets of the late individual.
19. In case some of the legal heirs are likely to go abroad and may not be available for execution of certain documents it is preferable to get a Registered Power of Attorney favouring the local legal heir. This will help in settling Bank Accounts and other dues.
20. Make sure to comply with income Tax provisions. For inheritance though the income is exempted, documentary evidence needs to be kept. If the deceased was income assessee take action to comply with Income Tax formalities like remittance of tax and filing ITR on behalf of the deceased.

Where to Invest

Health Is Wealth –Take A Health Insurance Policy

• The next is the need for a comprehensive health policy for the family. There could be unforeseen medical expenses in your sunset yearsandincreases.“O healthcare expenses.
• As age is increasing slowly health problems will come. As per an estimate, health expenses are increasing annually 15 to 20 percent. Do not forget - we will be financially stable only if we are healthy.
• If you do not have HEALTH Insurance POLICY, take one for at least Rs.2 or Rs.3 lacs. There are Health Disability, Personal Accident Insurance Policy. There are certain policies for the old age people.

PMVVY (Pradhan Mantri Vaya Vandana Yojana)

• Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government backed scheme sold through Life Insurance Corp. of India.
• In the event of the death of policy holder during the policy term of 10 years, the purchase price shall be returned to the beneficiary.
• During the policy period there is no pre closure option to the policy holder except on the grounds of critical illness.
• PMVVY-Premature exit is allowed only if the pensioner needs money for treatment of any terminal/critical illness of self or spouse.
• In case of such surrender, there will be premature exit penalty of 2%. one will get back 98% of the purchase price.

Senior Citizen Savings Scheme

Tenure of the Scheme
5 years, which can be extended only once for 3 more years.

Rateof interest : As per Government notification
http://www.unionbankofindia.co.in/government-saving-scheme.aspx

Frequency of Computing interest
• Quarterly

Tax aspects
• Interest is fully taxable

Investment to be in multiples of
• Rs.1000/-

Maximum investment limit
• Rs.15 lakh

Minimum eligible age

• An individual who has attained the age of 60 years on the date of opening of the account (Except NRIs and HUFs)
• 55 years for those who have retired under a voluntary or a special voluntary scheme provided investment is made within 1 month of date of receipt of retirement benefits.
• Retired personnel of Defence Services (excluding Civilian Defence Employees) on attaining the age of 50 years.

Facility of premature withdrawals
• Available after 1 year of holding but with penalty

Nomination Facility
• Available

Mode of Holding
• Generally single, joint mode is permitted but only spouses will be allowed to open accounts jointly with beneficiaries.

Investment In Shares

There is no need to pay any tax if you invest your money more than one year in SHARES or in EQUITY MUTUAL FUNDS. However, there is always a doubt of getting loss because of the rates related to Stock Market Index. You should not invest for short term gains; you have to invest and wait at least 3/5 years. You can expect 13% to 15% gains, if your investment is long term. If you want to take profit by selling within one year, then you have to pay 15% Short Term Capital Gains Tax. Beware that there is tax benefit only to the gains you get after one year. Select 4 to 5 Large Cap Funds and invest so as to reduce the fear of loss.

Balanced Funds

When compare with the investments in Shares and Equity Mutual Funds –in balanced funds there will be less fear of loss. These funds are long term and 35% of investments of these funds will be invested in the Government and Corporate Bonds. There will be no tax on the profits or dividends on this fund. These balanced funds are very much useful when compare with Full Debt Schemes.

Cash for emergency purpose

Sometimes we may need CASH for emergency purposes. To meet such type of exigencies, keep some CASH Balance in Bank A/c or in Fixed Deposits. As you know we can en-cash the FDR as and when we wish.

Nomination - Various Assets Classes

Nomination: In most of the asset classes, the legal position of the nominee is that the nominee has to act as a trustee and cannot ownership rights. The money rightly belongs to the legal heirs or to the person nominated in the will of the asset owner. There are exceptions to this rule.

In case of Nomination for the Retirement benefits like Life time arrears, Gratuity, PF and other Service benefits the nominee will receive owner ship rights. The employee while making nomination in such a way that he can mention the proportionate rights for each nominee.

In a Nutshell- Nomination with reference to Insurance Policies, Small Savings Schemes, Retirement benefits can create “beneficial ownership”. Where as in all other cases like Deposits, Shares, Mutual Funds, Nomination can create “fiduciary interest” only (Position of Nominee is only a Trustee to the legal heirs).

Even in Coop Society Flats, Nominee can get the shares /Interest transferred in his/her name. However, the nominee is legally answerable to the other members of the family, if they pursue their case of succession or inheritance against the nominee.

This highlights the imperative need for making a valid “Will” clearly mentioning the legal heirs of the testator, the manner of distribution among legal heirs or other persons on his/her death, name of the executor, to manage the estate until its final distribution.

Effect of Nomination on various asset classes:

1) Nomination for Bank Accounts

According to Section 45ZA (2) (Banking Regulation Act), nominee merely get exclusive right to receive money from bank. But he will not derive ownership rights. But point to be noted here is, banking laws will not be concerned about succession acts. Hence banks responsibility end once they transfer the amount to nominee. But it i and transfer the money according to succession act. He is answerable to the person nominated inthe will if any or to the legal heirs of the deceased.

2) Nomination in Government Small Savings Schemes like PPF, SCSS, NSC Etc.

Small Savings Schemes like PPF, SCSS, NSC, Post Office Time Deposit Schemes do not have the provision to confer ownership rights to the nominee. It is akin to Bank Deposits nomination. Such payment to nominee does not deprive the legal heirs and holders of succession certificate to receive the amount in the hands of the nominee. [Supreme Court decision in VIDYA Vs VISHIN case, October 2000 and D.G. Posts letter No. 105-26/93-SB dated 5.8.1994]

To obviate this Small Savings rules 2019 amended the Nomination form to include Ownership benefits to the nominee.In the present Nomination form, there is an option for the account holder to specify nature of entitlement, whether Trustee or Ownership with due share for each nominee. (Form 1)

Small Savings Rules 2019, rules provide Nomination facilities conferring ownership rights to the nominees of accounts like PPF, SCSS, NSC Etc.

Important Note: It is very important to exercise nomination facility for Small Savings Accountslike PPF, Senior Citizen Savings Scheme etc.

If account holder dies and there is no nomination at the time of death, the balance in the account, if it is up to Rs.5,00,000, will be paid by the Accounts Office to the legal heirs of the deceased on receipt of application in Form G supported with necessary documents without the production of succession certificate.

If the balance is more than Rs 5,00,000 then production of Succession certificate is mandatory.

How many persons can be nominated in Govt Small Savings Accounts?

Maximum four can be Nominated. at the time of opening of the account by furnishing the following information in Form 1: (a) Name(s) of the nominee(s);

(b) Percentage shares each nominee shall be entitled to; (c) Whether the nominee shall receive the amount as a beneficiary with absolute and exclusive right of ownership, or as a trustee for the benefit of the legal heirs of depositor.

3) Nomination Under Insurance Act 1938

• Nominee under Life Insurance Policies derives ownership rights.
• A nominee is appointed by the policyholder and can be anyone to whom the policyholder wants to give a valid discharge to the policy monies in case of death of the policyholder during policy tenure.
• As per Section 39 of the Insurance Act 1938, as amended by the Insurance Laws (Amendment) Act, 2015 (1) the policyholder of a life insurance may nominate the person or persons to whom the money secured by the policy shall be paid in the event of death.
• This nomination can be done when effecting the policy or at any time before the policy matures for payment. Where the nominee is a minor, the policyholder has to appoint a person as per the rules of the insurer, to receive the money on behalf of the nominee.
• Any immediate family member (like spouse, children or parents) is made the nominee. They will automatically become the beneficial owners of the claim benefits and be referred to as ‘Beneficial Nominee’. This means that the death benefit will be paid to beneficial nominees and not to any other legal heir.

What will happen if the nominee dies before the policyholder?

• Where the policy matures for payment during the lifetime of the person, whose life is insured or where the nominee or nominees die before the policy matures for payment, the amount secured shall be payable to the policyholder or heirs or legal representatives of the policyholder bearing a succession certificate.
• If the policyholder survives till the maturity, all benefits payable under the policy will be paid to the policyholder. In case the policyholder dies after the maturity of the policy but before getting the proceeds and benefits, then the nominee shall be entitled to the proceeds and benefit of that policy.
• It is always advisable to nominate an immediate family member to ensure there are no disputes in future between the nominees and legal heirs. A policyholder can change the nominee as many times as he or she wishes. However, the latest nominee supersedes all previous ones. At the time of nomination, always update the insurance policy to avoid disputes later.

4) Nomination in Mutual Funds

In mutual funds you can nominate up to 3 nominees for single folio and even you can distribute the % of sharing. Nowadays it is mandatory for mutual fund investors to specify whether theywant to nominate or not. If they don’t want then they need to declare it by signing. If they want to nominate then they need to declare at least one nominee. Here also nominee(s) to actas the trustee and not vested with ownership rights.

5) Nomination in Shares

• Here also nominee will not ownership rights but the legal heirs. Nominee is an important person; he or she has no rights over the money or shares unless that is specified under the will or the nominee happens to inherit the money.
• So as such a nominee is a mere custodian of the Shares.
• In the event of a person’s death, the Deposit instructions to act on the account. At the time of claiming, the nominee will have to give a proof of his identity to the relevant authority.

Transfer of Title-Immovable and Movable Properties

Immovable Property

Immovable Property standing in the name of the deceased:

1. How to Transfer the title to one among the legal heir?

• It is very important for legal heirs to secure the asset after the death of the person in whose name it is registered.
• One need to go through legal formalities to obtain ownership of a property. Formalities may differ based on the nature of the property, individual rights over it, the number of legal heirs and others.
• In order to get inherited property transferred in one’s name, that person must have substantial proof to claim the rights on the property and inheritance.
• In the presence of a Will, the process is relatively simpler; executors are required to administer the property as per the Will.

Documents Required:

1. Property Documents- title deed, Old Title deeds, Encumbrance Certificate, Patti, Tax Receipts, Electricity Bill, Water Tax, House Plan and Permit etc.
2. Will
3. Death Certificate
4. Probate wherever applicable.

Title transfer-When there is no Will When there is no Will –

The plausible and most convenient situation that can arise is that the legal heirs mutually decide amongst themselves and distribute the shares accordingly. The said distribution can be reduced to writing in terms of a family settlement which can be subsequently registered and the shares be divided in such terms. Typically, in the absence of a Will, appropriate succession laws come into effect.

Documents Required:

1. Property Documents- title deed, Old Title deeds, Encumbrance Certificate, Patti, Tax Receipts, Electricity Bill, Water Tax., House Plan and Permit etc.
2. Succession or Legal heirship Certificate
3. Death Certificate
4. Affidavit
5. Consent Letter from Other Legal heirs.

Important Points:

1. The affidavit along with a no-objection certificate from other legal heirs or their successors to be filed for registration. Any consideration that has been paid to other legal heirs towards settlement should be mentioned in the transfer deed.
2. The process is not complete with the registration to apply for mutation of the property title. It is done to record the transfer of a title of an immovable property from one person to another in land revenue records. This is required for the purpose of payment of property taxes, or to transfer or apply for utility connection in the name of the new owner. It also adds evidentiary value in respect of the title to the property. Mutation of property records takes place at the local competent municipal authority office in whose jurisdiction the inherited property is located. The documents required and the fees for mutation of a property differ from state to state.
3. If there is an outstanding home loan or any other loan against the property, one who is inheriting is required to pay the outstanding amount. However, if the deceased owner had a home loan insurance, the insurer pays off the outstanding. Once the payment is made, the inheritor must collect the loan clearance certificate from the lender and the original documents of the property that were given to the lender to avail the loan. Mortgaged property can be transferred only with the written consent of the lender.
4. Also, if the property inherited has been let out, the inheritor become obliged to adhere to the lease agreement signed between the lessee ( desirous of continuing the lease, then simply an agreement can be executed with the lessee wherein the lessee acknowledges that by operation of law the legal heirs of the deceased shall thereafter be treated as the new lessor.
5. How to Sell the Property in the name of the deceased?

One should make sure that there are no encumbrances over the property. In case the property is mortgaged to a Bank, no objection Certificate is required from the Bank for sale of the property. On issuing NOC, Bank will ensure that Title deeds are released only after proceeds are deposited with the Bank and the entire outstanding is cleared.

If the title deeds are free from encumbrance the following documents are required for Sale of The property.

1. Original Title Deed conveying the title in the name of the deceased.
2. All other parent title deeds, Revenue records, House Tax, water Tax Receipts, Electricity Bill, Building plan with approval etc.
3. Nil Encumbrance Certificate
4. Legal heirship Certificate
5. All the legal heirs should join together in execution of sale deed and registration. If any of the legal heirs are not available valid POA signed by them is required. If minor interest is involved his interest has to be legally protected.
6. It will be better to get a title opinion from a Layer to give comfort to the purchaser.

Vehicle Transfer in the name of the deceased

Transfer of ownership in case of death of the registered owner:

The legal heir of the deceased owner has to report to the registering authority within 30 days of the demise of the registered owner and his or her intention to be the owner of the vehicle. The legal heir can use the vehicle for a maximum period of 3 months without transfer of RC.

Important Points:

1. The new owner of the vehicle has to submit Form 31 to the registering authority by filling all the details that have been asked in the form.
2. The new owner of the vehicle should submit the form for the transfer of ownership within 3 months of taking actual ownership of the vehicle.
3. The new owner of the vehicle has to make the payment for charges levied by the registering authority for transfer of ownership of the vehicle under Rule 81 of the Central Motor Vehicles Rules, 1989.
4. The legal heir of the insured who is in the custody of the vehicle after the death of the owner should apply for car insurance policy transfer within three months from the date of the death of the insured or until the expiry of the car insurance policy (whichever is sooner)
   1. Death Certificate in respect of the insured
   2. Proof of Title to the Vehicle
   3. Original policy
5. Importance of Transferring Ownership of Vehicle of Deceased

One may think it is not important to transfer the ownership of a vehicle belonging to a deceased.However, not only would this attract penalty by the concerned authority, but the legal heir driving the vehicle would not be able to get any motor insurance benefits. If the vehicle is involved in an accident, the legal heir will have to bear all related costs as well as pay fines for driving without valid vehicle insurance.

In case the person is gravely injured during the accident, he/she may not be eligible for any personal accident benefits either.

Documents Required for Transfer of ownership if the owner of the vehicle isdeceased:

1. Form 31.
2. Registration certificate of the vehicle.
3. Insurance certificate of the vehicle.
4. Death certificate of the owner of the vehicle who is now deceased.
5. A certificate that verifies the pollution emitted by the vehicle being under control.
6. PAN card of the new owner of the vehicle and Form 60.
7. Copy of Aadhaar card (Date of Birth and Address Proof)
8. Passport size photographs (Two) of the new owner of the vehicle.
9. Legal heirship Certificate
10. Affidavits from the other legal heirs that they had relinquished their rights in favour of the applicant –these affidavits were on printed on stamp paper and notarized

Documents Required for Selling the Vehicle in the Name of the deceased

In addition to all the above documents the following additional documents are required

1. Succession certificate or legal heirship Certificate.
2. Clearance of Loan if any. NOC from the Bank or Financial institution to remove hypothecation clause from RC (Form 30 and 31 required)

Provision of Nomination Facility for Vehicle Ownership

• The Ministry of Road Transport and Highways has made some amendments in the Central Motor Vehicles Rules, 1989 in order to facilitate those who want to nominate a person in their vehicle registration certificate.
• This would be helpful if a motor vehicle will need to be transferred in the name of the nominee in case of death of the owner. As per the amended rules, an owner can put the name of a nominee at the time getting his/her vehicle registered.
• The nominee can also be added later with the help of an online application. The owner of the vehicle will have to submit identity proof of the nominee. When the owner of a motor vehicle dies, the person nominated by the vehicle owner in the certificate of registration or the one who is succeeding to the possession of the vehicle can use the vehicle as his/her own for a period of three months from the death of the owner. For this, the person will have to inform the registering authority about the occurrence of the death of the owner within 30 days of the occurrence of death.
• Further, to transfer the vehicle in his or her name, the nominee will have to apply in Form 31 within the period of three months from the death of the owner of the motor vehicle.
• In cases where the owner wants to change the nominee of the motor vehicle in case of contingencies like divorce or division of property, s/he may change the nomination with an agreed Standard Operating Procedure (SOP).

Maintenance and Welfare of Parents and Senior Citizens Act, 2007

This Act provides a legal framework to protect the rights and interest of parents and senior citizens.

It recognizes the right to ‘live with dignity claim maintenance from their children for shelter, food and medical treatment expenses. Another aspect of the Act is that it empowers the parents to reclaim any property back from their children

if they fail to fulfil their commitment of looking after their parents. In the unfortunate case of children not sharing the responsibility of taking care of their aged parents, they can be forced legally to provide them a steady amount every month to enable them to meet their basic needs at least

Useful Tips to make the succession plan Simple

1. Preserve the following documents carefully:

Details of Bank Lockers, Key Numbers and upkeep of Keys. Details of Bank Accounts and other investments.

Proper upkeep of Cheque Books, share certificates, De mat accounts, 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

Proper and safe upkeep of Password of email ID, ATM and Credit Cards, Bank accounts, online profiles, net banking, life insurance, vehicle insurance, Demat trading accounts, Income Tax e-filing etc. Phone number and contact persons name of the bank insurance co. Investment consultant etc. It can be in hard copy or can be digitally stored with a safe access known to next of kin.

3. Ensure Nomination

Ensure nomination in all investment accounts, lockers, Insurance Policies and Digital Assets. As far as possible all the investments be in joint names of self and spouse with nomination registered in every account. Ensure documentary evidence for registered nomination. One can cancel and re-register the nomination during the currency of investment.

4. Nomination for Social Media accounts

In the digital era the new concept of keeping the online Social Profiles, email ID's, Facebook data secure and nomination 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

Nomination does not legal right to the 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

It is better to maintain a register either as a soft copy or hard copy containing the following important particulars. This is only illustrative and one can improve add or modify depending upon the need and convenience.

• Contact Number of Close relatives/Friends
• Contact Number of Doctors/ Hospitals, Laboratories
• Contact number of Investment, Tax consultants.
• Details of Investments
• Details of assets including Movable/immovable properties
• Details of Life Insurance Policies
• Details of Health Insurance and General Insurance policies
• Details of Locker
• Details like Aadhaar Card, PAN card, Voter id, Driving License and Passport etc.
• House Tax, Electric Bill, Telephone Bill, and Water Tax
• 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

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

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.

If possible, prepare a Note, a guidance as how the assets you left behind to be handled by your next of Kin or legal heirs. You can share your thoughts and inputs as how best they can be handled /shared/used. Also, You can mention the name / contact number of your friend/ well-wisher/auditor/Legal counsel or a Reliable person from whom the next of kin or heirs can seek opinion on guidance in case of need.

RBI guidelines on Withdrawal of pension by old/ sick/ disabled/ incapacitated pensioners

(i) In order to take care of problems/ difficulties faced by sick and disabled pensioners in withdrawal of pension / family pension from the banks, agency banks may categorize such pensioners as under:

1. Pensioner who is too ill to sign a cheque / unable to be physically present in the bank.
2. Pensioner who is not only unable to be physically present in the bank but also not even able to put his/her thumb impression on the cheque/ withdrawal form due to certain physical defect / incapacity.

(ii) With a view to enabling such old/sick/incapacitated pensioners to operate their accounts, banks may follow the procedure as under:

1. Wherever thumb or toe impression of the old/sick pensioner is obtained, it should be identified by two independent witnesses known to the bank, one of whom should be a responsible bank official.
2. Where the pensioner cannot even put his/her thumb/ toe impression and also would not be able to be physically present in the bank, a mark can be obtained on the cheque/withdrawal form, which should be identified by two independent witnesses, one of whom should be a responsible bank official.

Agency banks have been asked to display the instructions issued in this regard on their notice board at the branches so that sick and disabled pensioners can make full use of these facilities.

Risk Cover and benefits available under various Insurance Schemes: Life and General Insurance (Accidental Death)

Risk cover for the same event under multiple insurance policies

Accidental Death Insurance Cover.

1. PMSBY- Pradhan Mantri Suraksha Bima Yojana Accidental death cover at subsidized premiumis available through Govt of India Scheme PMSBY implemented through Banks. Scheme details are as follows:

Eligibility -18 to 70 Years. Period June 1-May 31st. - Premium: Rs. 12 per annum-Risk Cover- Accidental Death- Rs 2 Lakh. Injury due to accident-Rs 1 to Rs 2 Lakh. Even if the account holder is having multiple accounts with the same Bank/Different Bank Risk is covered per policy holder only. (Max –Rs 2 Lakh)

1. RuPay Debit Cards- Risk benefit per Customer. Even if a person is having different RuPay cards,risk can be covered per person only. The Insurance policy is applicable for the compensation of only one eligible RuPay card per cardholder or per customer, even if multiple cards held by cardholder of same / different banks meet the eligibility criteria. The choice of the card for the claim would rest with the customer.
2. Visa /Master Debit/Credit Cards- Accidental Death -Covers Risk per Bank/per Customer,subject to conditions.

In respect of Accidental Death of a person, for the same person claims can be made for all the above categories.

1. In case of death happened due to Train/ Flight accident compensation can be claimed as per the Insurance cover available in respective Tickets. This is apart from any compensation sanctioned by respective Govt/Airlines,
2. In case of accidental death on roads involving Motor Vehicles, claim can be made under Motor Vehicle Insurance Act. Compensation will be decided by the court based on the age, income and dependents of the insured.
3. Apart from the above in case of death due to natural calamity, freak accidents State Government sanction compensation through Chief Minister’

This cover is available through specific \insurance schemes of the GIC, Banks or GOI Subsidized Scheme. In addition, debit (ATM Cards) and credit cards of the Banks have the in-built cover for accidental death. (In fact, many debit cards have certain unknown additional features as accidental death risk coverage, free access to airport lounge, baggage insurance, buyers’ protection subject to conditions.)