If your parent is an investor and invests in bank fixed deposits, equities, mutual funds or RE who is responsible for the record keeping?

When he is in the 70s your answer could be different, and when he is in his 80s your answer could be different! There are many children who think that they have no responsibility for the record keeping and whatever the parent is doing is fine. However, they have an interest on what is being left behind for them. Another set of people take full charge and handle the documentation well. I meet people from both the categories and do not have a strong view on both of them, but I do think that the first category just have poor communication skills. Some of them will even fret and fume about their parents poor financial / documentation skills but will not talk to them about it. Well, so be it.

But dying can be real messy, right?

I get at least one call a month saying…..somewhat like this: “My ………..(father, mother, brother,….aunt) has died and has left a motley group of shares, fixed deposits, mutual funds, bank accounts, …do you have somebody who can handle all this?”

“Actually I do not think it is worth more than Rs. 10 Lakhs (the figure can change, just one of the numbers heard recently), and me or my sisters do not care about this…but we need a closure.”

ME: Oh ye dutiful Next of Kin…..what were you doing when this person was alive?

“Oh he was MANAGING his own portfolio, and we thought he was doing everything right….we did not ask him”

ME: What about his demat account and trading account? “Arre he was trading in some shares, but I think over all he only lost some money over the past 3 years”

ME: You knew he was losing money?
Yes, Subra. But it was his only source of ENTERTAINMENT and we did not want to interfere.

ME: How many mutual fund schemes has he invested in? Not sure Subra, I think about 32 schemes ….
ME: and pray, how much is the amount…. Not sure Subra, but I do not think it is worth more than Rs. 2 lakhs in all the schemes put together. Subra tell me honestly what should I do with all this. Neither my sisters nor me are really interested in this money.
ME: Make a bonfire.
Subra you cannot be serious, right?

Well I am branded as a cynic, but if you guys had no time, no willingness, or no whatever to clear this mess when he/she was around, you will not want to go through the Indian messy legal system, right? Sorry, but your………..X did not ‘manage’ his portfolio, he GROSSLY MESSED UP and created a shit of a ‘portfolio’. Many of the shares are delisted, are part of a promoter’s quota, cannot be sold or just vanished. Yes you have some high value shares like Reliance, Tata Steel, ……but getting it transferred to your Mother’s name is not easy. Some of these shares are held in joint names with your sisters and brother – and the signatures have been ‘done’ by your dad. Even they do not know what kinda signatures have been used. The mutual funds are little less messy. All you have to do is to send the death certificate of your dads and get it ‘transmitted’ to your mother’s name.

However it makes sense to hold it in joint names of your Mom and you. For doing this you will have to get your KYC and your mother’s KYC done. This is a simple procedure but dealing with the mutual funds is avoidable if you have a choice.

I have no clue of any CA or lawyer who will be interested in a portfolio of Rs. 12 Lakhs, unless the fees is about Rs. 5 lakhs.

Your heart will not allow for this, because SOMEBODY else will tell you it can be done cheaper, really cheap. Frankly, BONFIRE is the best way out.

Afterall, you need to take the next flight out of the country do you not? Bon Voyage.

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  1. Very true.

    A lot of effort is needed…and in the end the processes may have to restart all over again for want of some small query!!!

    But in the end time=money, so have to decide which to pursue and which to make a bonfire of 🙂

  2. Yesterday i was tired of explaining my wife about the need of, her more active participation in record keeping and keep track of my investments. But couldn’t convince her.My job is now made easy.Will ask her to read this. Thank you subra sir 🙂

  3. Thanks for this insight subra. I fully agree with this thinking. When my father died, we ran from pillar to post to transfer his ‘single holding’ shares to my mother. Still, some cheap/dabba shares, MF units got missed out of the succession certificate.
    Thankfully, I’ve resigned and detached myself from those residual/leftover stuff. I no longer consider them my problem. Let the MF/Company handle however best they can or want to.
    And, of course, I have not let the same mistake persist in my mother’s case!

  4. Yes this is the sorry state.
    But the patriarch refuses to give up control, his way is the right way.

    He once threw upon me an MF SoA and insisted upon a certificate (like paper bond), and if I cannot produce one that means I have gobbled up the money (he had issued a cheque in the name of the MF)

    He has not prepared a will (at 86) and has been a income tax practitioner and prepared wills for his clients

    So Subra if children are not given the responsibility, whose fault is it, and I know I have to clear the mess after him.

    The best part, I am an investment adviser.

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