Three things Gen Z does not want you to leave them
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.
Confusion. After you are gone, your next of kin will spend the most amount of time figuring out issues linked to money. Bank accounts, fixed deposits, pension, Public Provident Fund, post office deposits, life insurance policies, mutual funds, lockers, real estate and vehicles—these are just some of the assets that they will have to deal with. A young friend lost her dad last year and found unpaid life insurance policies in the cupboard. Her father had been ill for a few months and had forgotten to pay the premiums. To figure out what policy was alive, on which policy premium had not been paid and how she could claim the money took her more than a month. Therefore, make a Will. Be sure to make it when you are in your 40s and then keep updating it. Accidents happen and lifestyle-linked deaths hit anytime. List out your assets in that Will. Give details like account numbers of banks, depositories, online portals through which you invest, agent names and numbers, location of papers, location of locker key—basically, if you take a moment to imagine you are not around and your family is struggling to find papers and make sense of your financial life, what you need to do to help them will be clear. Do that exercise. And then clear up the clutter and confusion of your money life. Ideally, have a cupboard or a place in the house that has all the paperwork in well-marked files that are updated regularly.
Property. Do a favour to your children and don’t leave them real estate assets other than the one house you live in now. Even if the children are in India, dealing with property issues in smaller towns far away from their place of work is going to make life difficult for them. A friend’s father had several properties he had given out on rent. One of the houses had a tenant who was paying rent that he had not raised for 10 years. The tenant had no intention to move. To evict the reluctant tenants to sell the properties needed skills that go beyond money and finance. Even if there are no ownership issues, big fights break out in families over real estate assets. Keep it simple, invest in financial assets and clearly mark out who gets what.
Debt. Don’t leave debt for your family to deal with. If there are home loans or other loans, ensure that you have a term life insurance cover that will take care of the debt in case you die. If you finish paying off your debt and are still alive, you can either let go of the term plan or continue it—your income would have gone up in this time and the need for higher cover will justify keeping the additional cover.
Know that even after you have done all of this, there will still be piles of paperwork for your next of kin. Inheritance is a cumbersome process and not everyone is rich enough to afford family offices and trusts. Remember to make these decisions before you are too old. With old age comes loss of physical and mental power. Do this when you are still at the top of your game. In doing this for those you love, you may end up living better since the sharper focus on your finances and the lack of clutter will make you far more empowered than you feel today.
Monika Halan is consulting editor at Mint and writes on household finance, policy and regulation