How to help our life partner manage money in our absence

Last Updated on March 8, 2022 at 8:25 am

In this article, we discuss how to set up a guide for our life partner or spouse to help them manage money in our absence. Let us call this the continuity kit. Absence here not only refers to the death of the main money manager but also refers to situations like job transfers, promotions (with less time to manage money) etc.

We shall consider a typical scenario where only one partner takes care of all money matters even if the other partner is earning. There are also many households (including mine) where the other partner knows nothing about investing, paying bills, taxes etc and worse is simply not interested in learning. We shall consider this situation.

The shocking death of Shane Warne is a harsh example of the uncertainty of life. On Feb 28 2022, he tweeted, “Operation shred has started (10 days in) & the goal by July is to get back to this shape from a few years ago!” Often life has a plan of its unknown.

Naturally, we cannot account for all uncertainties but a half-full glass is any day better than an empty one.

Continuity kit considerations

1. It should be available online and offline. Nobody cares where you do it – on Evernote or Google sheets or a 40-pages notebook. You can type it on notepad and print it. What matters is accessibility and easy instructions.
2. There is no template to fill in either! Your life cannot fit into my template and vice versa. Let us create our own using common sense.
3. Today, your partner may act disinterested and irritated if you discuss this with them, but they will locate it if/when the time comes. So no point over fretting.
4. The inactive partner should have primary access to the document at all times.
5. There should be no need to update it regularly unless there is a major change.
6. A trusted SEBI registered fee-only financial advisor should be mentioned in the document as the “go-to” person for all clarifications. A friend from the office can help with getting settlements from there. Many of my father’s friends continued to help my mother years after his death wrt pay commission arrears etc.
   • Ideally, it would be best if you engage a fee-only advisor and force your partner to sit with you for a session (after the plan is created). Bribe your partner if necessary! This is crucial because they will have at least a partial memory of how your finances are being managed.
7. A continuity kit is not a will. A will is part of the continuity kit.
8. The partner should be made a “second holder” in all accounts where possible and not as a nominee. Since the second holder will have proper KYC credentials, the transmission will be much easier than nomination.
9. If you wish to apportion assets among family, they can be made second holders in different accounts depending on your comfort. Doing this is the equivalent of an “open will”

Continuity Kit Contents

Listed in approximate order of need.

1. Location of emergency cash stash at home
2. Location of health insurance documents and cards. In the case of group insurance, contact details of office personnel.
3. List of bank accounts and location of bank passbook and debit cards
4. Contact details of SEBI Registered fee-only advisor and trusted friend whose investing compass is aligned with yours. Else some old uncle will offer unsolicited “guidance” and upset the apple cart.
5. List of credit cards held with links to find out the balance to be paid.
6. List of other EMIs to pay. Insured loans like home loans are not an issue upon death, but the bank has to be notified. If you have some stash of cash held that can be used to clear off a loan, indicate the same.
7. Location of Pan Card, Aadhaar card, License and other forms of ID.
8. Location of important documents like EB card, Water tax, property tax, pension documents with information on when and how to pay.
9. Term Insurance and other life insurance documents with instructions on how to claim (forms are available on insurer sites). For group insurance, contact details of office personnel.
10. List of monthly/periodic payments to be made with websites: Internet bill, Telephone bill, EB bill, Water tax, Property Tax, health insurance premium, school fees etc.
11. Information on how to apply for a death certificate.
12. List of offices to be immediately intimated on death: Bank Pension branch, Home Loan disbursing office etc.
13. Information on how to apply for a legal heir.
14. Use a password manager with a master password that cannot be stored. Ask your partner to set the password and check from time to time if she remembers it. Better still each time you log in, ask for it
15. The “forgot password” option can always be used but they will need to access your email and phone. So use only one email (with password mentioned in the continuity kit) and ensure they know how to unlock your phone! <= Thanks to my friend Rajkumar for this. When Rajkumar’s father suddenly died, no one knew the passcode for his phone. Thankfully his young grandson remembered!
16. List of all short term financial goals (< 10 years away) and investments associated with each of them.
17. List of all long term financial goals (> 10 years away) and investments associated with each of them. That session will the fee-only advisor may come in handy here! If all investments are already tagged to goals or at least listed and available with the fee-only advisor, a major headache is taken care of.
18. Link to Cams Karvy Consolidated MF Account to get all mutual fund holdings via registered email (15 is important!). This may or may not retrieve Demat holding as well. So better to include information to get the data from CDSL. Zerodha has a helpful article.
19. If you are tracking all investments in a single portal then its login details.
20. Information regarding other investments: PPF, RDs, FDs, real estate, stock options etc.
21. If there is a HUF in place, the advisor or a CA can help. Ashal Jauhari from the Facebook group Asan Ideas for Wealth can also help with this or any of the above aspects.
22. If there is a will in place then instructions on how to implement it.
23. Some general instructions on the transmission on units or money. Some require just KYC details of the nominee; some require a legal heir (property, pension annuity) etc. Some research and documentation on this will be immensely helpful.
24. Details of additional responsibilities or sources of income.

How to invest the assets to generate constant income or inflation-protected income (depending on the asset value)? How to plan for the future of children if they are young? How to handle outstanding debt?  These are fairly complex questions for someone who has no experience in money management. Therefore it is best left to a fee-only advisor. All the more reason, why you should engage one today and set up the foundation.

That is as far as my thinking takes me. If I have left something out, please do let me know. Each person’s circumstance is different and the kit will change accordingly. A set format will not work. creating the kit is nothing more than common sense. Please do this immediately!