Your financial footprint is the trail of your financial dealings that you leave behind for others to follow, particularly your heirs; it's similar to looking for footprints of your past travels. It is impossible for a typical adult to exist and not leave financial footprints, just as it is difficult to walk without leaving tracks.
It becomes crucial to you for a variety of reasons to be aware of all the many financial footprints that you might be leaving behind.
- How else can you be confident that some of your investments or savings won't be lost to your heirs simply because they are unaware of them?
- How else can the legal and administrative loose ends be tied up during your lifetime to make it simple for your heirs to acquire and utilize what you leave for them?
- You cannot properly manage them during your lifetime or leave a clear legacy for your heirs unless you recall and take into consideration every little account you have, active and dormant, as well as every small claim in or against you.
- Lastly, and perhaps most crucially, having a list of all your financial holdings will ensure that nothing of worth is left out of your will. This could spare your successors a great deal of difficulty—both practical and emotional.
Now is the time to assess your financial footprint so you can maintain them current for an accurate view. The value of having a will cannot be emphasized, but the first crucial step is to make an exhaustive inventory of everything that might be relevant to include in your will.
Here is a typical collection of financial footprints, some of which are too significant to be overlooked, some of which are too little or insignificant to be noticed, and others of which you probably won't even consider to be financial in nature. See if you're leaving any of these, or all of them, in your wake.
Land: Large or small pieces of land that you directly purchase based on multiple recommendations, usually spread around the nation. You might have also bought land while participating in a group in which you hold a portion of the holdings.
Buildings: Given that your house or residences are substantial physical assets, it is challenging to ignore their financial impact.
Insurance policies: After the owner of the policy passes away, the beneficiary receives the proceeds. Similar to this, a terminal illness may result in health insurance reimbursements that must be requested by the person covering your hospital expenditures after your death.
Bank accounts: Financial assets that you won't forget include your term deposit accounts, big bank accounts that you use frequently, etc. What about the accounts you had to open because your previous employer only paid into a certain bank and then neglected to close when you changed jobs? These accounts could have been opened in any city or nation.
Credit Card Accounts: There may be significant unused amounts in these accounts if you have a history of using many credit cards from different banks and retailers.
Pension Accounts: Don't forget about pension plans that you may have contributed to while living in another country, perhaps as a student or a temporary worker, and to which you may be entitled but which won't be paid out until a certain number of years have passed. This category also includes private pension funds to which you may have made recurrent contributions.
Shares and Debentures: You may have acquired these and they may be in your name in a demat account, or you may be the nominee, or you may have a claim due to a bequest made by someone else.
Brokerage Accounts: One asset that has to be monitored is the balances in your brokerage accounts, which may draw payments through dividends or pay-ins even after your death.
Safe Deposit Lockers: This financial track is frequently overlooked. Lockers are rented out at various locations without letting anyone else know in an effort to keep sensitive materials safe and hidden from inquisitive eyes.
As you can see, your financial traces could be found in a variety of unexpected areas. It is simpler to consider if any of your decisions might have an economic impact at the moment you make them than it is to leave this task to your descendants or to yourself at a later time.
Your financial footprints also include any money you end up owing as a result of actions you have taken or plan to take. Yet we've left them there for your creditors to add to their list.
An excellent method to close off your financial life is to keep a running inventory of the financial footprints you leave behind, keep it updated, and include every single one of them in your will and testament. Don't break this promise.