Five Ways to Leave behind a Financial Legacy for Your Children

Feb 22, 2019 | 1 month ago | Read Time: 3 minutes | By iKnowledge Team

Financial legacy is an important aspect of financial planning and gives you a clear picture on how to distribute your wealth in terms of assets (tangible and non-tangible) amongst your nominees.

It is common for parents or couples nearing the 40-50 years age bracket to wonder what they would be leaving behind for their children to inherit. Or how they will be remembered by their children and grandchildren?

Therefore, the question remains. How does one plan to leave financial legacy for their children?

1. Prepare a Consolidated List of Belongings

It is always a wise approach to list down your assets versus liabilities. Start with the assets that are easy to value, such as savings, and valuable objects like heirlooms and jewellery.
At the same time calculate the worth in rupees of every asset category that you want your children to inherit. This asset category could be a real estate property, jewellery, bonds, shares, fixed deposits, cash so on and so forth.

2. Be Clear to Whom You Wish to Pass on Your Financial Belongings

While listing down your assets or belongings is a fairly simple task, deciding on who will benefit by inheriting this legacy is a difficult choice. One has to be clear and think logically whilst appointing children to whom you may want to pass on the assets. There will be instances of conflict but learn to tackle those calmly with the help of a legal advisor. 

3. Protect Your Handicapped Beneficiaries

It may so happen that one of your beneficiary (one of your children) could be suffering from a mental illness or a physical disability. In such a case you may want to set up a trust to ensure that your hard-earned money goes to the rightful heirs (as stated in the will) in your absence.  This means the rightful amount goes to the assigned disabled beneficiary.

  1. Appoint an Executor
    An executor is a legally responsible person who is given the authority to oversee proper distribution of the deceased’s wealth to the rightful heir. Due to the executor’s neutral view of the situation the process flows smoothly with no further obstruction and delays.

    Miscellaneous tasks such as getting a copy of the will and filing the same, informing or notifying the banks and credit card companies or government institutions about the decedent’s expiry are also carried out by the executor.

    5. Buy a Term Insurance and Nominate a Successor
    This means you can transfer the term insurance by placing it in an irreversible trust. For this you will have to buy term insurance from a reputed insurance company. The trustee appointed will ensure that premiums are paid and the money is divided among the nominees as decided. Normally term insurance plans are transferred to an adult relative or child.

    You could evaluate term insurance plans by Aegon Life such as iTerm Insurance Plan, iTerm Plus Insurance Plan and iReturn Insurance Plan and select one which suits your requirements better. Let us understand these plans in brief.

    a) iTerm Insurance Plan
    This plan can be purchased online and provides coverage to your family up to 100 years. The insured gets 25% of the sum assured on the diagnosis of terminal illness. Once a terminal illness is detected, all future premiums are waived off. In case of accidental death, critical illness, women specific critical illness and disability, the insured can opt for additional coverage.

  2. b) iTerm Plus Insurance Plan
    iTerm Plus Insurance Plan provides cover until 80 years of age. The insured has the option to apply for increase in life cover. iTerm Plus Insurance Plan provides coverage against death, illnesses and disability due to accidents. This plan offers four different plans such as Life Plan Benefit, Life Plus Benefit, Life & Health Benefit and Life & Health Plus Plan.

 

  1. c) iReturn Insurance Plan
    iReturn Insurance Plan provides cover against death and terminal illness. The insured has the option to acquire cover against accidents, critical illness and disability.

    Financial planning helps you put things in perspective and is an essential component of wealth creation. To learn more about wealth creation click here https://www.aegonlife.com/insurance-investment-knowledge/from-savings-to-fortune-5-easy-steps-for-wealth-creation .

II/Feb 2019/4846

 


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