Financial secrets is a bad word. Financial planners or experts suggest that Financial secrets can KILL any relationship. I agree but only if the intent is financial infidelity. Sometimes Financial secrets are good if the intent behind the same is good and may prove to be healthy for any relationship. It’s NOT a Secret that Money can be both blessing and a curse. It is one of the three key reasons for all the disputes/crimes in this world. My blog cover two such reasons i.e. Money and Property. The third one is women. Some blogs are dedicated to relationships including that of one of my good friends. These three reasons are popularly known as zar, zoru aur zameen in Hindi. The money matters should be handled very carefully. Reg property, as i keep highlighting that it is the most valuable asset acquired during the lifetime. Therefore, it is but obvious that Financial Secrets will revolve around these two assets only :).
The billion dollar question is how much is too much? It can be either ways i.e. how much to conceal or how much to reveal :). Coincidentally, some of my recent interactions with my clients ended up with a discussion on financial secrets. Personally, i believe in practical experiences rather theoretical ones as suggested by experts. Therefore, almost all my blogs carry real life examples with the practical learning’s. Earlier i was of the opinion that there should not be any financial secrets (among family members) but now i have changed my views on this topic. The reason being, the human greed supersedes all the good deeds of others. Thanks to my readers for sharing their experiences and learning’s. Based on that i am sharing the top 5 secrets, you should not share with anyone.
Financial Secrets – Top 5 you should not share with anyone
1. Insurance Coverage:
According to the national crime details, the motive to claim insurance coverage is one of the key reasons for crime in the family. In fact, out of 10 cases on one of the most popular crime show, three are directly or indirectly linked to insurance money. This is true for term insurance policies that provide extraordinary coverage i.e. 10 times annual income. In terms of savings, it is 33 times annual savings as i shared in my post, Term Insurance Policy – 5 Surprising Reasons to Buy. It is not possible to save the amount of term insurance coverage during a lifetime. In one of the post, i read that businessman are opting for big insurance covers but are not disclosing the same to their near and dear ones or beneficiaries. Secondly, if all the legal heirs are not equal beneficiary then it may cause heartburn. In one of the case, there was a dispute among the sons reg beneficiary of the insurance policy of their father.
Based on the experience of readers of this blog, you should never disclose the insurance coverage to anyone. Recently i watched a beautiful Ad of HDFC Life named “Memories for Life”. The father left the message for a son that was shared only after the death of a father. Similarly, Insurance coverage should bring good memories after the death rather becoming a curse or a cause of dispute during a lifetime. The major concern of an insured is that beneficiaries should be aware of the policy. It can be easily done by recording all the details in the WILL. The insurance coverage amount is one of the top financial secrets.
2. Family Settlements:
Family settlements/agreements are very common. Those can be executed during the lifetime or after the death, by the family members. It is important to include a confidentiality clause in such agreements. The aspirations of family members may be different. It is not about equal distribution but the fair distribution. Such settlements can be challenged easily. Sometimes fair distribution means take it or leave it. As the executors know the content of such settlements/agreements and it may take years to execute the agreement. Therefore, it is another important financial secrets if you are part of any such family settlements.
3. Content of your WILL:
Earlier i was of the opinion that beneficiaries of the WILL should be aware of the same. I mentioned the same in some of my posts. Now i believe that it deserves to be in the list of financial secrets. It should be a pleasant surprise for beneficiaries :). Money may not build relations but can definitely spoil. You can appoint an executor. Ideally, the executor should be a lawyer. The WILL should be registered to avoid any future dispute.
The inherited assets are the most disputed ones. Even after 2 to 3 generations, the legal heirs of the family chain can stake their claim. How it works is that assuming my grandfather had not left any WILL. The assets of my grandfather were divided based on Hindu Succession Act or through Family Settlement. My father passed on the inherited asset to me and i bought a house from the same. Now my cousins can dispute the original distribution terming it as unfair. Indirectly, the inherited asset or investment made from the sale of the same will be disputed. Though it is highly unlikely scenario but a possibility, if the stakes are high.
The point i am trying to make is that if you are the beneficiary through inheritance, it should be one of the financial secrets on how you invested or utilized inherited assets like bullion, cash, property etc. Though i am free to use as per my wish but in the case of dispute, it will be counted as a disputed asset. The objective is to show that you have spent the inherited amount in a non-productive way i.e. household expenses. None of your assets are acquired or bought from inherited assets. Though it is not feasible always but you should play smartly by keeping it as one of your financial secrets.
5. Unexpected Beneficiary:
If you know that you are the unexpected beneficiary/nominee of any asset that does not fall under succession act or class I legal heirs then it should be kept as guarded financial secrets. To share an example, in one of the cases, Person A executed a WILL in the name of his nephew. When this secret was revealed the children of Person A tried to harm their cousin brother. They also forced their father to change the WILL. Therefore, the point i am trying to make is that if you are unexpected beneficiary then better to keep the mouth shut and treat it as one of the financial secrets. In such cases, it is imp for person A to inform beneficiary as he/she is the unexpected beneficiary and should be aware of his/her rights. This information should be restricted only to Testator (who makes the WILL), Executor (Responsible for execution of WILL) and the Beneficiary.
Words of Wisdom: The crux of the matter is that some of the financial matters should be financial secrets, to avoid dispute. If the emotions related to these matters run high, it can end up in a crime. The best way to avoid these situations is to record all financial secrets in the WILL. Rather than listening to financial planners, we should be practical in our approach. As the anchor of one of the popular crime show always say that human mind is very complex. You never know what is going on in other person’s mind. Though i shared three reasons for disputes/crime in this world but what works behind the same is GREED. Some people can control and those who can’t control ends up behind the bar. To control the greed of others, i can keep financial secrets as secret only till i die.
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