1 week ago
Planning Who Will Manage Your Finances During Incapacity
People usually plan what happens to their money after they die.
They should also plan for a time when they are alive but too sick or injured to manage it.
A trusted person may need to find bank accounts, investments, insurance and bills.
Keeping a list of these things can make the process easier.
Bank statements, tax records, emails and phone messages may help families find missing accounts.
A power of attorney can allow someone to handle certain financial tasks.
If the person cannot legally make decisions, a court may need to appoint a guardian.
Wealthy families may use a private trust to manage assets.
These plans should be prepared carefully because financial authority can be misused.
Maintain a complete record of bank accounts, investments, insurance, property, loans and important contacts.
Bank statements, tax returns, emails, phone messages and professional advisers may help locate undiscovered assets.
A power of attorney or authorization letter may help a trusted person manage finances when the investor retains contractual capacity.
If the person lacks contractual capacity, a court-issued guardianship certificate may be required.
Private family trusts can provide continuity for wealthy families, but powers of attorney may be misused.
- Who
- Investors, their families or legal heirs, trusted financial representatives, guardians and trustees.
- What
- The article explains how to prepare for financial management if an investor becomes incapacitated.
- Where
- Across the person’s bank, investment, insurance, tax and other financial accounts.
- When
- Before an accident, illness or other incapacity occurs.
- Why
- To ensure assets can be located and managed for the person and their dependents when they cannot make decisions.
Key facts
- Asset records
- Investors are advised to keep records of assets, liabilities, accounts, investments, insurance, property, loans and important contacts.
- Potential records
- Bank documents, passbooks, cheque books, diaries, tax records, email accounts and phone messages may help trace assets.
- Bank statements
- Statements may reveal systematic investment plans, insurance premiums, dividend or interest income, loan payments, property payments and transfers.
- Power of attorney
- A power of attorney, mandate letter or authorization letter may be used when the person has the capacity to contract.
- Guardianship
- A court-issued guardianship certificate may be required when the person lacks the capacity to contract.
- Required verification
- The article cites a doctor’s certificate, in-person verification, a thumb impression and online login credentials as potentially needed.
- Private trust
- A properly structured private family trust may allow appointed trustees to continue managing assets for very wealthy families.
Quotes
Harendra Zatakia
Sebi-registered investment adviser and founder of Wealth Aligned Financial Advisory
“Assets placed in the trust can be managed by appointed trustees according to the trust deed. So, if the individual later becomes incapacitated, the trustee can continue managing those assets without the family having to figure everything out at that difficult time.”
livemint.com
“A Power of Attorney can help a trusted person handle specific financial matters when someone is unable to do so. But it should not be seen as a complete solution for incapacity, particularly where mental capacity is involved.”
livemint.com
Sources
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