Being prepared for death and disease

Many of us are working from home – students, teachers, office going people, gig workers etc. A lot of people have lost their jobs and many industries like Travel & Tourism, Aviation, Hospitality, Organised retail and Malls, Entertainment is bearing the brunt of the crisis… even the ubiquitous shops of all hues are suffering because of lockdowns, restrictions in timings, lack of footfalls etc.

The worst thing is that we do not know when it will all end. We do not know whether there will be a third, fourth or more waves in future. There is enveloping uncertainty.

In the second wave in India, the infection has been wide-spread and it has also claimed a lot of lives. Many families have lost their near and dear ones.

For many families, the income earner is no more, throwing them in turmoil. In many cases, it plunges the family into a chaos as they have no idea about their family finances. Most people in such a situation, have been caught unawares.

We need to come to terms with our mortality and get sensible and practical if we want to protect our families from unwanted chaos and turmoil. 

What I am about to suggest will be useful in situations beyond Covid and would apply to any situation where we need to deal with death or serious illness and being indisposed.

I would like to bring your attention the following important points –

Sorting finances

1. It is important for the spouse ( and family members as necessary ) to know about the finances, at least in a broad manner. In many cases, this may ensure the family knows where they are financially, instead of being lulled into a false sense of security. Also, this will ensure that in an unfortunate event like death, s/he will be able to pick up the pieces and move ahead much faster, financially.
2. It is essential to maintain complete information ( and keep the information updated ) about one’s investments in one place and share it with one’s spouse. Also, information about whom to contact for which investment, should be put down too.
3. Simplify investments. Have limited number & types of investments. One need not have all offerings of all financial service providers! Have limited number of bank accounts too. Also, limit the number of agencies/ parties for your investments, as this will reduce the complexity. These basic steps by themselves are a major step in helping the family to cope easily.
4. This problem will be greatly alleviated if you have an advisor who knows all about your situation. In such a case, the advisor will be able to take over and guide the family, without missing a beat. That in essence is what we offer to those of our clients in the Perpetual engagement. Read the last benefit in the Benefits of engaging with Ladder7. This may unfortunately look like blowing our trumpet. Sorry about that. But it is entirely true.

Succession Planning

7. Have all investments in both names with an either-or survivor operating mode. This will ensure that the investments will not get stuck. Have nominations in place in all cases.
8. Change nominations such that they are also the natural beneficiaries, in all cases. For instance, change the nominee to spouse after marriage, instead of parents, siblings etc.
9. Have a will ( for both spouses, if married ) in place and update that document every 3-4 years or earlier, if necessary. Registration is optional.
10. Create an annexure of all investments as on the date of the will and attach it to the will. Annexure is not mandatory; however, this can be a very valuable document for the next of kin. Keep adding updated investment annexure to the will, atleast once in a couple of years
11. A trust may be required in case one feels the need to protect the interest of a special child, vulnerable spouse/ parents ( if felt so), to ring fence assets from creditors, IT authorities and for specific other reasons ( like philanthropy).

Creating and maintaining a trust is costlier – it creates a tax entity, needs accounting, auditing etc. Trust is suggested only in specific cases, when the situation warrants and a will won’t do.

Passwords/ access methods

10. We are in a digital age and there are user ids and passwords needed everywhere. Best to have a document that has all passwords (and keep it updated) in one place, which is shareable between spouses/ other relations. It is best to have a google doc created and share in an email which is maintained for the specific purpose of sharing sensitive information only.
11. Always have a number lock for your mobiles and laptops. Never have a device without some form of numeric or alpha-numeric locking. Also, do not store important data on the mobile.
12. Ideally, do not have fingerprint, Iris or face recognition enabled in your mobile or laptop. These unlock mechanisms are easy methods to misuse and can potentially be used even if one is indisposed. This can be dangerous.
13. Also, do not have patterns on the mobile. In an emergency, conveying a pin is far easier than a pattern.

Discussion on life threatening situations

14. On rare occasions people have gone into a vegetative state or coma due to a variety of reasons. In these situations, keeping such people on life support may be an option. But, many times, there may be a very slim chances of emerging back from it in a healthy state. Also, it can be a very expensive proposition.

Even doctors suggest that in such situations, one should just take the person concerned home and not keep them indefinitely on life support. As a family one needs to discuss what their position is on these matters and what is the preference of every individual in such a situation. It is best to discuss these now itself and be prepared for such eventualities, if it were ever to come.

Of late a living will is allowed to be drawn up, where life support can be withdrawn in terminally ill cases or those in vegetative state, which can be mentioned in a living will.  This needs to be drawn up separately if one wants to.

15. Some people, especially when they are old, do not want to go to hospitals and keep prolonging their lives. Such sentiments should be paid heed to and acted upon, especially if the person has totally become dependent. Even these should be discussed in the family and a consensus reached.

These are common sensical points, yet they are important. The most important thing is that many of us stub our toe by not doing the obvious stuff.

Hope you found the obvious stuff useful!