Covid-19 Impact – Steps to be taken post death of family member

Covid-19 has taken many lives worldwide. The recent virus surge in India resulted in several deaths. Countless families lost their loved ones, and they are left to face unprecedented post death issues. Right from paying off hospital bills and getting a death certificate to finding a will or getting an exact idea about the property or other assets left by the deceased, the survivors go through many practical difficulties. The post death formalities that need to be undertaken are explained here-

• Obtain a death certificate-The death certificate should be obtained from the local authorities. When the death takes place in a hospital, a form is duly filled with details like the name, age, address of the deceased. Then it is submitted with the registration center/zonal office of the local municipal body from where the death certificate is issued in the specified time. 

For settlement of property inheritance and to authorize the family to collect insurance and other benefits, a death certificate is a must. Moreover, since there are specific compensations etc. given to a Covid victim post his/her death, obtaining the certificate is quite important. 

Recently the Supreme court has asked the State for inclusion of Covid-19 in the death certificate as the reason of death, as non-mentioning of the same has caused many problems for the families that become eligible to various compensations.

• Consolidation of all financial holdings- While closing a bank account or transferring money, assets or investments or to sell the assets of the deceased, attested copies of death certificate are required. Multiple copies of the death certificate can be downloaded from the municipal website. 

Every death needs to be reported and registered within 21 days in the prescribed reporting forms. Failure to do so will need more paperwork and make the entire work cumbersome.

The exact details of the deceased should be filled out by the legal heir or any other authorized person to match with the official records like PAN card and Aadhar card. A spelling mistake or a name written with initials will cause problems. 

Locating the financial documents or records is another important step to get the exact details of the financial situation. It could take a long time to collate and sort out all the documents. Bank related papers, insurance, stocks and mutual funds, savings schemes if any like NSCs, taxation and property papers, loan and EMI records, membership of clubs etc need to be traced. 

Notifying the financial institutions is the next thing to be done. It is important to understand that before closing or shifting the funds from any account, the amounts which legally become due for receipt or payment on account of death, must be adjusted first. Do not prematurely take any decision. Do all the procedure in the presence of the people who are supposed to conduct the formalities.

A locker might get frozen if the account to which it is attached gets closed. 

If nominees are mentioned clearly then transfer of bank deposits and investments will become very easy. A death certificate, the nominee’s identity proof and residence proof can ease the process. However, nominees are representatives of legal heirs and do not have any legal rights.

In the case of a bank account, meet the bank officials and request them to carry out the procedure required to claim all the asset from the bank. Relationship with the deceased should be mentioned while producing the proof as nominee KYC documents etc.

If the 1^st account holder passes away, then 2^nd account holder can inform the bank with the application stating that the 1^st holder has passed away and make him/her the first holder to have the access to the money.

When it comes to mutual funds, the transmission takes place in the name of the nominee or to the joint holder. Different forms and annexures can be downloaded from the website of mutual houses or the mutual fund regulator (form T3). Copy of PAN card of the nominee or guardian in case of a minor needs to be given. KYC acknowledgement, cancelled cheque with the nominee’s name preprinted or copy of the nominee’s recent bank statement or passbook (not more than 3 months old) are required. 

As we all depend a lot on technology and don’t keep paperwork, it is very important that the family members share the details of the digital information about all financial holdings with each other. 

• Check for the will or get a succession certificate if there is no will or nominee-It is significant to locate the will of the deceased. Financial and inheritance matters can be better solved when there is a will. How much share is due to whom and from which assets can be determined only through a will. In absence of a will there shall be higher chances of disputes. 

If there is a Will, the executor shall do the needful. When the nominee is not mentioned then the bank will ask for the written Will. Where the Will is missing the bank requires the succession certificate to decide who is the rightful owner of the money.

• Insurance policies-You need to notify the insurer and provide information to make a claim. The names of the beneficiaries are already mentioned by the deceased while setting up the policy. Both term policies and permanent policies entitle the beneficiary to receive the insured amount while the policy is active. The beneficiary has the option to choose the policy amount to be in the form of a lifetime income, a fixed one-time payout option, getting only interest income and leaving the policy amount with the insurer, a lump sum payment etc. 

Submit a request for benefits and a death certificate. In case of multiple beneficiaries each one may need to provide a separate form. Check the form before submission and ask the insurance company if you have any doubt. Because a mistake may cause delays and frustration. The claim might get settled within a months’ time. Often the claim amount is tax free. 

• Property and other assets-When a Will is documented, the allocation becomes easier. But in absence of a Will there could be forms to be filled and court’s intervention to obtain some documents. Four documents are needed to claim an Asset after death: a death certificate, claim application form, probate of Will and succession certificate. 

As far as the property of the deceased is concerned, in absence of a Will, the property is divided equally among the surviving legal heirs. They have to file a succession suit to get equitable partition of the property.

The authority issues a notice seeking claims on the property to be distributed among legal heirs once the death certificate is issued. If there is a dispute among the legal heirs and they fail to share it as per their mutual understanding, the court shall adjudicate the matter as per the law. 

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