How to Handle the Finances When You Lost a Parent

Losing someone very close to you is not easy. I lost my Dad on 26th April 2021. It was one of the more challenging days of my entire life.

I still can’t get over it that I lost my Dad in front of me. My brother and I had been doing whatever we can to take care of our mom.

As I am writing these lines, I am still getting goosebumps. And when you lose a parent, minor incidences can shake you up.

Let me share one such moment.

I have kept my Dad’s phone with me to handle the finances.

I couldn’t recall his number. So I called my phone from his one. I saw the name on my phone as Dad. I couldn’t stop thinking that I will never get a call from this number anymore in my entire life.

You want the time to stop, but it doesn’t. Life moves on, and then you also need to handle the finances of your lost parent.

So let me share what one should be doing when you have lost a parent and how to handle their finances.

Death Certificate is a Must

A death certificate is a must document that can help you close bank accounts or sell a property. Further, if they have insurance, you will need a death certificate to claim it.

The process for a death certificate is straightforward. First, we had to provide a Xerox copy of my Dad’s AADHAR card in the graveyard. Then they gave me a form that needed to be submitted at the municipal corporation.

In a month and a half, I collected the death certificate. However, because my Dad died in my hometown, issuing a death certificate took a little longer. In cities, it is a matter of days. Further, anyone can’t collect the death certificate, and only those with blood relationships can collect it.

Legal Heir Certificate

Generally, in India, we don’t have a will, and in the bank accounts that are opened a few months earlier, we don’t have a nominee either.

A legal heir is a person who becomes the owner of a person who died without a will.

The legal heir for my Dad was me, my brother and my mom. Legal heir certificate denotes the relationship between the legal heir and the deceased.

It becomes a mandatory document when there is no will, and there is no nominee specified.

Legal heir Certificate establishes the relationship between the deceased and the legal heir. Further, we have a Succession Certificate.

Locate All Property Documents

Whenever my brother or I visited our hometown, my dad used to tell us where he kept all the documents. So we both knew where to get all the documents.

There is a land in our hometown that he has owned since 1992. In the past 4 to 5 years, he made sure we both brothers visit the site so we can locate it.

He did whatever he should be doing for us. Further, he also made sure we knew where he kept the property documents. We always used to tell him that we know everything, but now we realised it was a process on his part.

Locate All Financial Documents

You should know all the investments that your parent has:

• Shares and Mutual Funds (My Dad had no investment in shares or mutual funds for the past five years)
• Bank accounts (We knew about all his bank accounts and even operated them online)
• Gold / Cash (My mom knew everything about it)
• Insurance if any

However, now when I look back, I realise that life is fragile. My son, daughter or my wife have no idea how to view my demat accounts holdings.

In the past few months, I am trying to let my legal heir know about my shares and mutual funds investments. As a result, they should know how to sell and encash them if needed.

Further, I have a joint bank account with my wife that I wanted to close. However, now I have decided to let it remain because it exists in online banking in both of us. So one can transfer money between them, and she can withdraw money after me.

Locate All Payments That You Need to Make

You have to locate all the payments that you need to make on behalf of your parents.

• Credit Cards (My Dad didn’t have any)
• Loans: Personal, Home, or Car (My Dad didn’t have any)
• Any person to pay (My Dad didn’t have any)

Again, I think I have to educate my legal heir a lot because there are six credit cards that I own and manage.

Further, I use online services (domain, hosting) for my website that charge my credit cards.

I don’t have any loans, but I need to make sure my credit card process is known to my family and how I use them. In addition, I need to make sure that my family knows the password to each of them and are well equipped to be able to use them as I do.

Locate All-Vehicle Documents

When an owner of a vehicle dies without a nominee, the legal heir can use the vehicle as their own for three months only.

In the meantime, the legal heir will have to inform the registering authority about the death and transfer the vehicle ownership.

My Dad owned a scooter, but it was in my name only. So there was nothing that I needed to do.

File IT Return

Finally, when we talked with our CA, we realised that one needs to file an IT return the one last time. Because my father died in April 2021, we have some time before it needs to be completed.

Further, we need to make a family agreement to transfer the assets into our books (bank balance, properties).

Let me explain with an example.

We used to operate my dad’s bank account online. So we can do an online transfer of funds. However, it will mean the amount remains as a loan in our books from my dad.

The reality is, we need to make sure the asset transfers from my dad to us now. We can do it once we file the IT return and move everything in our books.

Final Thoughts

I was stunned when I lost my dad, but because he had very little money that we needed to pay back, the process didn’t have too much financial impact on us.

However, it may not be the case with everyone.

So it is essential to know what parents are doing.

If you are a parent, let your wife and kids know. Correct information can help them, and believe me, and it does help. For example, I never realised why my dad wanted us to go with him and see the land he owned since 1992.

If you are a son or a daughter, keep the mobile phone aside and listen when your parents are talking about their assets or liabilities. They are doing it for you.