Money With Monika: How to write a will | The Corona Conversations
Updated: 24 Jun 2020, 12:28 PM ISTLivemint
From covid-19 pandemic to meteor shower, 2020 has been a year of unprecedented events. In this special series of Money with Monika, personal finance expert Monika Halan explains the process of writing a will and how it can be transformative for you and your family. Watch the full episode for Monika Halan’s advice
We’re at the stage in the covid-19 journey where the fear of death is fast getting replaced by the fear of the healthcare system—at least in cities like Delhi that have seen flip flops by the state government and very poor use of the lockdown days to plan for the expected peak in June. The safety protocols that were in decline got a revisit as we got to know of people around us who got the disease. Their horror stories of dealing with the healthcare system scared us right back to self-isolation and the ritualistic cleaning and disinfecting after every visit outside the house.
But once fear sets in, it is difficult to shake off. The number of people pinging, mailing and calling me to figure out their Wills grew as our own taken-for-granted mortality became a question mark. Even if the disease does not kill me, joked a friend, the healthcare system in Delhi will.
6 lessons I learnt from the pandemic about my health and money.
1. The month need not cost so much. Everybody can save if in Covid-19 mode.
2. Emergency fund is a lifeline, build it according to age and stage.
3. Markets go up and down, not you.
4. Implement your age and stage asset allocation, don’t just understand it.
5. Write a Will – your net worth is not protection against falling ill.
6. Do an SIP in your health. Workplace will chew you up and spit you out.
We are now lockdown veterans. We quickly learnt to survive a new situation and most people made the best of it—that is the human spirit, we are determined to live, despite saying otherwise. There are six lessons from the way the pandemic has affected our health, income, wealth and prospects that I want to share. I must admit that in all the years of writing about, planning for and going through rough events, this is something that I never took into my own calculations. So while the big broad rules remain firmly in place, there are finer nuances and learnings. Here are the six things I learnt while still a quarter of the way through this pandemic.
One, it costs very little to live. When the first full cycle credit card bill came, it was a fraction of earlier bills and I am not a spendthrift. But travel and work seem to add to the bills. Petrol costs were down to zero, bills around eating out, clothes and entertainment were all zero. When just the basics are being bought, I found that the month costs very little. Of course, you need to be debt-free for that to happen. Our saving capacity is much higher than we thought. This is especially true for people who had earlier thought that they had no capacity to save. The rising bank FDs tell their own story as more and more people salted away their savings into FDs over the past two months. Once we are out of this, remember that the lockdown mode is there to target a higher saving rate whenever you desire.
When you get to the stage that there are more funerals and prayer meetings than birthday parties to attend, you know that you have crossed the line that marks the declivity towards death. At the after-meal at one such prayer meeting in the home of a close relative, the post-lunch groups broke age-wise into huddles. While the generation Z was in one room bent over their devices, each communicating with other gen Zs, the over 70s were in another room, heads close together. We, in-betweens, looked after both before our own huddle. After two decades of work, the extended family has finally accepted the fact that I might know a bit about money and finances. So, I am summoned to the old gang to discuss Wills —“Monika ko bulao,” rings the command from the eldest silver. As I wade in, I find the group divided down the middle. One set is vociferous in their pro-Will stand and recommends handwritten Wills over an online standard format. The other group looks suspicious. They fear two things and are over-confident of a third. One, the acceptance of their end of time. Two, the fear of the kids not looking after them once the assets are earmarked. Three, they are confident that their kids will not fight over assets—however big or small—and that a Will is needed only if there is a dispute. “My kids will never fight” is almost a statement of faith about their own parenting skills.
The next few generations may be able to dis-inherit the genetic bequeaths of diabetes or cancer or other ailments that parents have passed on to their offspring. Progress in genetics and medicine could make freedom from such bequeaths a matter of the ability to pay for the procedure and not the lack of availability of options. But while we wait for that not-so-dystopian future, there are a few other things that your children don’t want you to leave them. Having helped several friends and family deal with sudden exits of elder and not-so-old family heads, I get how harrowing dealing with the mess is. The time to grieve hardly gets over before the messiness of the lives of the departed come to shake you by the shoulder. These are the three things to avoid in your legacy.
Rs1,09,544 crore. According to the Reserve Bank of India (RBI), this is the money inunclaimed deposits in all scheduled commercial banks in India in 2007 . Add another Rs3,800 crore of unwanted money with the Employees Provident Fund. And several thousand crore more of unclaimed funds with the Life Insurance Corp. of India (LIC), for which I do not have any data, but expert estimates say it would be in four digits with a crore sitting comfortably behind. Why would somebody sweat away at work, stay away from kids, lose out on taking holidays and doing what they really loved, fight, scheme, machinate to get money under their belts and then die with all of it lying unwanted in some cold vault in the innards of the Indian financial system?