Whether sudden or unexpected, the death of a loved one/parent is a harrowing time for us. It becomes even more so if the person happens to be the family's breadwinner. In the circumstances, handling finance matters while coping with emotional pain, can be stressful. The survivors/legal heirs have to go through a number of official procedures while claiming the assets of the deceased owner. While it is difficult to prepare yourself emotionally, here are the steps you can take to manage the practical issues a bit more easily.
1) Death Certificate:
One of the most crucial documents at the time is the death certificate. It is, indeed, the one document which is an absolute necessity, no matter what. This certificate is a document which certifies officially that the person in question is dead. Death certificates also are an official record of the date and time of death which, in most cases, is also a crucial information for a life insurance claim. To begin with, the hospital asks the family to write the exact name of the deceased. Ensure you get this right, as this is what will go into the death certificate. Any deviation here will cause a lot of problems later.
The death certificate from the municipal authorities is different from the one that the hospital gives which has to be handed over at the crematorium/ burial ground. The caretaker at the crematorium/ burial ground gives a printed slip in return which needs to be preserved carefully. About 10 days after the funeral, visit the municipal website and enter the date of death. A list of those who expired on that day appears. Select the name from there and download as many prints you want—(at least 20). This document will need to be submitted everywhere for death claims, etc.
2) Execute the Will:
If the deceased has left behind a Will, the executor (appointed in the Will) needs to provide probate, a document issued by the court authenticating that the Will is genuine. In case the person died intestate, that is, without a Will, his legal heirs need to get a succession certificate from the court. It is required for handling the finances of the deceased. Consult a lawyer for this.
3) Legal Heir Certificate
An important step in the whole process is to get the legal heir certificate
from the local tehsildar
. Find out which tehsildar
’s office the deceased’s residence falls under. Visit the office with the death certificate and fill up/submit the form along with copies of all ID proofs of the remaining family members and copies of all financial instruments. If this process is stuck, meeting the tehsildar
can help in putting pressure on the revenue inspector to act faster. This, typically, takes three months, but with sustained follow-ups can be expedited. There are touts to do this, but you can do it yourself.
4) Sort Out Documents and List Assets:
Make a list of all assets, investments and documents related to property and financial assets. Hence, proceeding in an organised manner helps, especially if the portfolio has a number of instruments.
Savings bank accounts
Bank fixed deposits (FDs)
PPF (Public Provident Fund)
EPF (Employee Provident Fund)
Mutual funds (MFs)
Life insurance policies
NSC (National Savings Certificate), KVP (Kisan Vikas Patra)
Post-office MIS (monthly income scheme)
Post-office Senior Citizen Savings Scheme
Post-office time deposits certificates
Recurring deposits certificates
Real estate documents
Stocks and shares
5) Filing Claims at Every Financial Organisation:
One needs to reach out to each of these financial organisations and understand the process required to get the assets transferred. It is helpful if the accounts are held on joint/ either-or-survivor basis. If it is a joint account, one just needs to delete the deceased person's name in the account and continue with it. If the account is in single name (with nominee mentioned), the bank will give a nominee claim form that needs to be filled. It is the same process for FDs, and MFs.
6) Dues/ Liabilities:
If there are any pending credit card bills, etc, pay them off at the earliest. Also, liabilities like home and car loans should be cleared. Close the credit cards. The best thing would be to utilise insurance proceeds to pay off the liabilities (if any). If the deceased person was the main bread-winner of the family, continuing EMIs (equated monthly instalments) can be a problem. If the spouse is not earning, a part of this money should be parked in fixed-income instruments which can generate regular income. If some money is still left, allocate it for future needs such as children's education and marriage.
The legal heir has to file the income-tax returns for the deceased person for that year and pay tax if required. So, if the investments or savings amount is taxable, do calculations to check if 15H has to be submitted in those banks/companies where the surviving wife/husband will now become an account-holder. Get to know the deceased’s auditor in advance. This simplifies a lot of things, including accessing his latest income-tax return, which in turn gives a lot of status update.
8) Bank Locker:
Get to know the number of the bank locker and where its key is kept. Get the locker transferred in the name(s) of the legal heir(s).
9) Bank ATM Cards:
The name on the ATM card will need to be changed (in case of joint accounts). If the deceased has not shared his/her PIN number, a fresh ATM card has to be applied for by the heir after the bank account name transfer has happened. You would need to also fill up another form for getting internet banking access.
This is a key issue for government employees. The process of pension name transfer is decentralised to the respective banks. Hence, you can follow up with the banks directly. Typically, the pension is credited in a public sector bank and it is not a joint account. But it is useful if the spouse/ kids have a separate bank account in the same bank, as transferring becomes easier later.
Visit the bank with death certificate and they will give you a set of forms to be filled in/submitted by the spouse. You then need to wait for up to a month. Till this time, even if the son/daughter wants to get into an employee’s retirement system (ERS) arrangement with the bank on the existing account, it wouldn’t be possible as the pension office will check if the account-holder is single before releasing pension to that account.
11) Central Government Health Scheme (CGHS): This is a boon for government employees but the process involved can be a nightmare if the deceased has not mentioned the spouse as nominee. There are two aspects to CGHS—expense bills claim and cardholder name change.
For the expense bills claim after your parent’s demise, you need to get the bill forms filled by the claimant (spouse) with his/her CGHS Card ID number. But all bills need to carry the following:
A) Legal heir certificate
B) No objection certificate (NOC) on stamp paper from the children (original with each bill). This needs notarisation.
The bills have to be submitted within three months of the death of the deceased. The card name change can happen only after the pension transfer takes place, so there is a linkage here. Contact the CGHS headquarters in your city and obtain the forms to be filled up.
12) Property: If the deceased has left behind a Will, then there would be clarity. If not, the ownership should be registered with the help of legal heirs to either the surviving spouse or the children, as the case may be. This requires detailed paperwork and you should contact your lawyer to get the list of documents that need to be traced regarding the property, right from the sale deed to encumbrance certificate (EC). The physical registration ideally can be done in one step, as re-registration (which involves repeated fees) can be avoided. Going to the same lawyer who advised your parents will make things easier.
13) Insurance—Life, Vehicle and Medical:
Each company has a different protocol. But the death certificate and legal heir certificate are the starting points. Check if the insurance has been taken through an agent or from the insurance company directly. If your parent had a separate folder for insurance, that could save time. For life and medical insurance, it is good to go to companies directly, for vehicle it is best to go through an agent who will help with the transfer of the vehicle to your name.
To pre-empt the hassle, make sure you take following steps:
1. Bank accounts/FDs/MFs to be created/invested in jointly with the spouse with nominee clearly mentioned. Ideally, account or investment should be with one bank for the sake of simplicity of handling. Share with family -where is the bank locker key kept and what is the locker number.
2. Who is the deceased’s auditor/ lawyer and their co-ordinates?
3. Maintain a diary/spreadsheet that captures all investment details/ important phone numbers of the deceased? Ensure the family has access to it.
5. Where are the original property documents kept?
6. Which bank does his/her pension get credited to? Has the deceased named the spouse as a nominee? Does the spouse have an account in the same bank?
7. Many forms need attestation or witnesses. Who can do that? Line up at least two of them.
8. Where are the deceased’s ID proofs such as Aadhaar, PAN (permanent account number) card or passport, kept?
9. Registering a nomination for a demat account helps eliminate the need for documents such as Will, succession certificate for transmission of securities.
10. Keep the passbook or an online printout of the nominee name ready, else the bank database will never let the nominee in. PSBs still rely on hard copy ledgers and if the nominee is named there, they do not require anything else, except a visit in person.
11. Keep the deceased's cell phone handy all the time. But do not attempt to change the online access passwords or linked mobile numbers.