What you are about to read in the following paragraphs may seem morbid. But if you are currently retired, you should be able to appreciate the importance of end-of-life planning. This includes the medical care you may need if you are incapacitated and how to apportion your assets, including keeping your spouse financially comfortable after your lifetime.

Why important? Imagine for a moment that you have not prepared your end-of-life planning. What if you are incapacitated due to a terminal illness or your life ends suddenly?

You would have left behind real assets such as a house; financial assets in the form of stocks and bonds and cash in bank accounts. Should your spouse spend time worrying about whether you have left enough money to last her/him for a lifetime and how to transfer existing wealth to his/her account? The point is this: A grieving spouse is already stressed. And taking decisions at such a time may often turn out be regretful. End-of-life planning helps in this regard. How?

Your end-of-life planning involves both financial planning for your family, especially your spouse, and healthcare planning for yourself. As part of financial planning, you could decide on how to divide your assets among your spouse and children.

You can do this as part of a Will that you could create for this purpose. You can also make a document detailing who will take decisions on your behalf in the event you are incapacitated.

While it is best you engage an adviser to help you with the end-of-life planning, you could start the process with certain basic measures. You could take the following measures during your lifetime to reduce the financial burden on your spouse after your lifetime.

Basic measures First, ensure that all your bank accounts have your spouse as the nominee. This will help your spouse transfer the balance in your account to his or her own account by producing a death certificate.

Second, operate at least one joint bank account. This will ensure that your spouse has immediate access to money for the short term. Also, maintain valid debit cards on this joint account for easy withdrawal. Third, have joint ownership of your immovable property, including land, if possible. This will reduce the cost of transferring the ownership of the asset and ease the process of selling the property, should the need arise.

Fourth, if you are in a phased retirement and are the sole earner in the family, have a valid term insurance policy. Fifth, maintain 12 times your monthly living expenses as emergency fund in a joint account. This can be a mix of fixed deposits and savings bank account.

Finally, invest a portion of your financial assets during your lifetime in such a way that your spouse receives monthly income to meet living expenses after your lifetime. This could be in the form of monthly income deposits with banks or joint annuity from an insurance company.

An important part of the end-of-life planning is to involve your spouse in the planning process and documentation.

Agreed, end-of-life planning is not an interesting subject that you would like to discuss with your spouse at a fancy restaurant over dinner. But it is an important part of your life process that you need to address.

The writer is the founder of Navera Consulting. Send your queries to >portfolioideas@thehindu.co.in

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