There is a list of the 16 most crucial financial documents and other items that our families should have, preferably compiled in one place, such as a file, folder or Life Book:
1. Your Will
This is by far the most important document for any individual. If you don’t already have a Will, please make a Will this weekend without fail. It is not difficult, and is very important to do. If you have a Will, ensure that it is relevant even today i.e. it does not exclude any further assets you may have accumulated or any changes in your personal and financial circumstances.
Keep the original Will in a safe place and keep a copy with a trusted loved one. Make a note of both these in your Financial Life Book.
Here is what you need to enumerate, moving through the list from cash and debt to equity and property:
2. Bank Accounts: bank name, account number, passwords to operate the online account (if applicable), name and number of the bank Relationship Manager, credit card / debit card number, ATM PIN, holding patterns of the bank accounts.
3. Bank and Corporate FDs: include a list of your currently held bank and corporate deposits, with details of date of investment, date of maturity, rate of interest, interest payment schedule, and mention the storage place of the original FD certificates.
4. PPF and EPF: your Public Provident Fund passbook, a photocopy of your passbook (we recently faced the case of 2 separate clients who have misplaced their passbooks while shifting houses), your EPF slip from your employer (if applicable)
5. Mutual Funds and Shares held: this should include details of your current stock brokers, mutual fund distributors, their contact numbers and the name of the person you deal with, the latest portfolio held with the broker and the holding pattern of the investments within these separate portfolios. Make sure that these investments are in line with your financial plan to achieve your life goals such as your retirement, your children’s educations, your children’s marriages and so on.
6. Property: property title deeds, share certificates, nomination details of any properties held. This along with other original documents should be kept in a safe place such as your bank locker.
7. Other Assets: vehicles owned, their papers, other assets such as jewellery or gold and other metals, their documents and holding brokers.
8. Home Loan / Personal Loan / Car Loan / Other Loan
You need to keep the following details in one place:
Original Loan Document stating loan amount, start date, rate of interest, whether fixed or floating, tenure, lender details i.e. name of bank or organization from which the loan is taken, name and number of contact person at the organization, contact email of the organization.
Also keep handy a record of all the payments (EMIs) made including the latest one. If the lender sends you email receipts of your payments, take print outs and keep them in your liabilities file.
Also make a note of any additional capital that you have repaid early (Perhaps you have chosen to partly prepay your loan, this should be recorded as well)
9. Loan related insurance
You may have taken (or been sold) insurance along with your loans, if you have any. Keep a record of the insurance policy number, premiums paid and contact person at the insurance company.
10. Life Insurance
You possibly have multiple life insurance policies. Keep the policy document in a safe place, make a note of the beneficiaries. And have a record of the premiums paid. Be sure to pay your premiums on time so that your policy does not lapse.
11. Health Insurance
Your families and your health insurance policies should be kept carefully. Some policies these days provide health ID Cards, which can be carried in your wallet. You and your family should know the number to call in case of a medical emergency, to inform the insurance company within 24 hours so that the insurance can be processed smoothly. Keep a record of the policy number and the number and email address to contact in case of a medical situation.
Relevant Professionals Contact Numbers
12. Your Lawyer and / or your CA
13. Your Stock Brokers
14. Your Financial Planner
15. Your Insurance Agents
16. Your Bank Relationship Managers
Also make a note of the customer relationship department’s number for all the companies concerned.
How do I go about gathering all this information and storing it?
This exercise might seem like a task, but if you take it one piece at a time it will not be tiresome at all, and the sense of accomplishment and control that you will feel over your financial life and protection that you will be offering your loved ones will be immense.
For example, start with your assets and your bank accounts, as these are what will be enumerated in your Will. Over the course of 1 week, list out all the details mentioned above for bank accounts and assets.
Immediately after that, next week, move forward to your Will.
Going forward you can complete your insurance details and last but not least your liabilities.
Do be sure to undertake the exercise immediately, as those who delay will end up most likely not doing it at all, and you don’t want to be lazy, and then find yourself or your loved ones in an unfortunate situation.
If you would like to get your financial plan made, do contact us at 9333100221