Even as we confront the reality of the pandemic and plan our financial wellbeing in these unpredictable times, one piece of the financial puzzle that is sometimes neglected is an adequate succession plan. While the complexity varies depending on factors such as the size and type of assets, the number of beneficiaries, etc. Succession Planning is certainly a must to ensure smooth propagation and functioning of personal wealth and business.
With a new sense of maturity in our lifestyles and income, while we are witnessing an increase in the middle and upper class of the economy, there’s also an increase in the wealth of these households. The Hurun India Wealth Report recently revealed a new household group in India called the ‘New Middle Class,’ which has an average annual savings of Rs 20 lakh. Hurun India estimates that there are 633,000 such cumulative households in India. The ‘Indian middle class,’ on the other hand, has an annual income of above Rs 2.5 lakh and a net worth of less than Rs 7 crore. In India, it is estimated that 56400,000 households fall under this group. Additionally, there are 412,000 dollar-millionaire households / affluent households in India with a net worth of at least Rs 7 crore.
However, out of these, over 60,000 people do not even have a primary legacy will in place and these are the ultra-rich we are talking about. In the absence of a formal will, the inheritance is distributed according to the religious succession plans. Even though people’s earnings are increasing, their knowledge in succession planning and the wealth transfer is still lacking behind. With the financial and technological awareness on the rise, there is a need for a proper succession plan in place for the families. Succession planning provides continuity, strengthens capabilities, preserves value, and fosters harmony, all of which contribute to the creation of a legacy.
Having a sound legacy transfer plan, not only helps in the smooth transition of the process but also ensures that the legal heirs do not have to go through the lengthy process, desk to desk or legal battles, to secure their share of the inheritance. A lot of work goes into creating a fool proof succession plan.
Many people just wander the desks of financial institutions to claim their money in the form of Fixed Deposits, Savings Accounts, and Insurance policies. There is no surprise the amount of unclaimed money with these institutions is almost 1.5 lakh crore rupees, out of which the Life Insurance Corporation of India (LIC) has 21,500 crore rupees. This is an example of how people are not aware of their claims and holdings.
Compliance with several laws, abiding by the formal procedures, and completing the formalities takes time. Also, keeping tons of documents in physical form requires lots of space. Although the majority of people use electronic records, the majority of people still preserve paper records. To make sure that it takes the least time to get your inheritance, it is advisable to keep all your family’s history and records in place, to avoid last-minute confusion. We are living in a digital age, where technology has helped us in every part of our lives. As the world gets more digital, it’s reasonable to speculate about new ways to record and retain information. Many individuals are unsure how long their records should be kept. Even if you just preserve data for a few years, the amount of space necessary to store them is enormous. You can preserve a lot of papers in an orderly manner using digital records. Moreover, digital storage requires no effort. It takes half the time to deal with records, allowing you to save yourself from potentially dangerous circumstances.
Keeping your records online enhances the aspects of shareability as makes it easy to share them with family and friends, and can be transferred within seconds.
While the family succession process is long and cumbersome, we can try to make it more systematic and structured. Knowing what you need to make a will, or how to transfer your financial holdings, personal possessions, and various other formalities to your next generation, will only leave you peaceful and your children, stress-free.
All your documentation – legal, financial, personal, medical, in one place will aid you in transferring your legacy, seamlessly. Imagine a digital portal, of all such information regarding your succession plan and life’s history, saved in the most secure way, which you can access at any time and any place. There are multiple platforms today with the ability to keep the records private and secured in just a few simple steps with the ones who are going to be a part of your legacy and the ones who need to be aware of the succession plans.
It’s not about the paperwork and documents. But the experience of transferring your life’s hard work to the right people, effortlessly. It is about the joy in the eyes of the people while inheriting your legacy.
About the Author:
Darsh loves to talk about technology and believes that “ A Revolution begins with an Idea”. He is the Co-Founder and CEO of Monech – the world’s 1st end-to-end legacy planning and legacy transfer service in one holistic place. He is the 1st to use technology to streamline and build an end-to-end hybrid stack: during life & afterlife: arenas in the service and also the 1st to create a business model which can be included by organizations, corporates as part of their Employee Benefit Programs: by Multinational Corporates, govt. institutions, police forces, sportspersons, etc. Monech is recognized by Maharashtra IT Hub: Mumbai FinTech Hub at IIT Bombay’s flagship Entrepreneurship Fest (backed by EY and Govt. of Maharashtra)
Darsh has previously worked with Goleccha Capital Pvt. ltd, Zell Education, EduPristine, Goldman Sachs, United Nations Information Center, etc in various different roles.
He completed his Bachelor’s Degree in Business Administration – Finance and Accountancy from Christ University, Bangalore. Later Darsh went on to become an ACCA with AIR-1 and Global Rank – 7 in Financial Management. He has also completed CFA level 1.
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