ESTATE PLANNING: FINANCIAL MISTAKES FAMILIES MAKE AFTER A LOVED ONE’S DEATH — AND HOW TO AVOID THEM

The death of a family member brings emotional upheaval, often disrupting financial discipline at a critical time. However, this is precisely when staying focused on financial matters becomes crucial—neglecting them can jeopardise the family’s future. Timely, well-structured decisions can provide much-needed stability. Here’s a checklist to help navigate finances during such a testing time

Death Certificate

“The passing of a loved one is a period of profound emotional strain and there is a critical time window to securing a family’s financial future which starts with obtaining death certificate and auditing all existing assets and liabilities,” comments Abhishek Kumar, SEBI RIA, Founder- SahajMoney

Issued by the government to the deceased’s next of kin, it records essential details such as the date, time, and cause of death. Typically, up to ten copies can be obtained, each carrying a unique serial number.

Assets and Liabilities

It is important that the kin of the deceased makes a list of assets and liabilities. Assets can be in the form of bank account, shares-mutual funds, real estate, insurances etc. Liabilities, on the other hand, could be credit card, tax, loans, equated monthly installments, bills and so on.

Once the assets and liabilities are listed, it is important to transfer these to kin’s name and clear the liabilities as early as possible.

Insurance

In case of insurance, the normal duration (for notifying) would be between 30-60 days; this can be different for different insurance companies. It is important to act quickly, as the claim settlement process can take time, and initiating it early helps avoid unnecessary delays.

Will

Will is one of the most important financial documents. It can be written even on a blank paper, there no obligation that a stamp paper needs to be used. It will be noted as valid if it is signed by the person making the will (the testator) and witnessed by at least two people.

If there is a will, it makes the nomination facilities for various assets very smooth and efficient

“One should Immediately prioritise must include notifying insurance providers within the standard 60 day window and identifying existence of a valid will to streamline the legal transfer of property, bank accounts, and investment holdings of the deceased member of the family,” adds Kumar

Re-planning Finance

On notifying the institutions and transferring assets as per the will, it is important to re-plan the family finances.

If the deceased had a life insurance policy, the claim proceeds should be deployed or used judiciously. Likewise, funds received from other investments should also be managed and reinvested in a prudent and efficient manner.

For example, in case of the death of an earning member, the future income from investments and insurance claims may not match the regular income earned by him or her.

Hence, “The family should proactively evaluate their long term financial stability by managing their living expenses in a sustainable manner along with reinvesting insurance claim proceeds and other savings to bridge the gap left by a lost primary earner,” concludes Kumar.

2026-05-09T03:17:12Z