Imagine your family trying to settle your finances after you're gone. They know you've invested over the years, but where? Was it one mutual fund or six? Which bank held your fixed deposits? Did you have an old demat account, a forgotten insurance policy or an EPF account they never knew about?
These are no longer hypothetical questions. A recent Gandhinagar case, where a family had to approach court to access the digital estate of a deceased relative, highlighted a growing reality: as our financial lives become increasingly digital and spread across multiple platforms, they can also become much harder for loved ones to piece together.
That raises a simple but important question: if something happened to you today, would your family know where all your money is?
A nominee is only part of the solution
Many investors believe that once they've added nominees to their investments, their family's job becomes easy. Estate planning experts say that's only half the picture.
"Appointing a nominee is an important administrative step, but it is often misunderstood as a substitute for estate planning," says Asha Kiran Sharma, Partner at King Stubb & Kasiva, Advocates and Attorneys.
In many cases, a nominee is authorised to receive the asset, but the final ownership is governed by a Will or, in its absence, succession laws. That's why experts recommend treating nominations, a valid Will and proper documentation as complementary, not interchangeable, parts of estate planning.
The bigger challenge is finding the assets
Surprisingly, the legal process is often not the biggest hurdle.
"The absence of an organised asset trail creates greater hardship than the legal succession process itself," says Sharma.
He adds, “Think about how your finances have evolved over the years. A salary account from your first job, a couple of savings accounts, mutual funds across different AMCs, a demat account, insurance policies, EPF, NPS, perhaps even a digital wallet or an old investment you no longer track. If nobody knows these accounts exist, they can remain unclaimed for years while families spend months tracing investments, contacting financial institutions and completing paperwork.”
Create one document that maps your financial life
The simplest way to avoid this is to maintain a financial inventory, a single document that gives your family a complete picture of your financial life.
Mukesh Kumawat, Executive Director at Anand Rathi Wealth Limited, describes it as "A complete snapshot of an individual's financial life" that allows family members to easily locate and manage assets when required.
Here is what your financial inventory should include:
Beyond investments, Kumawat says, “Investors often overlook pending insurance claims, tax refunds, bank locker details and financial obligations where they are a co-applicant or guarantor. These seemingly small details can save families significant time and confusion later.”
Don't share passwords, plan digital access
As more of our financial lives move online, experts advise against sharing passwords directly with family members because of the risk of misuse or cyber fraud.
Instead, consider using password managers that offer emergency or legacy access features. Platforms such as Apple and Google also allow users to nominate trusted contacts who can access certain digital accounts if they become inactive or pass away.
Experts also recommend reviewing your financial inventory at least once a year, or whenever there's a major life event such as marriage, the birth of a child, buying property, making significant investments or updating nominees or your Will. Keep the document in a secure place, but make sure your spouse, an adult family member or the executor of your Will knows where to find it.
We spend years building wealth but very little time documenting it. A one-page financial inventory won't change who inherits your assets, but it can make sure your family actually knows where to find them when it matters most.