How to access assets when breadwinner is incapacitated

Sebi has proposed giving more powers to nominees in case the asset owner is incapacitated

- Aprajita Sharma

We money and invest it. But what if we fail to ensure its smooth transition to our legal heirs? Wealth transmission post-death is a challenging process. What does not gain much attention is accessing a breadwinner's investments while she is alive but incapacitated, that is, physically or mentally unfit to manage one's financial affairs.

work hard to ensure that our family lives in comfort in the present and in the future. We earn Niranjan Vemulkar, co-founder and chief executive officer of Yellow, a digital will-making platform, shares an example. "We know of a case where the breadwinner went into a coma. His assets were frozen and a good amount of money was needed to pay the hospital bill. The family had to move court to release some of these assets. But the court cannot allow transferring or withdrawal all assets in one go. They open the tap in a controlled manner only for specific purposes," Vemulkar says. To be sure, an incapacitated person may get better in the future, and a court cannot allow transferring assets of a living person.

While there are laws like the Rights of Persons with Disabilities Act, 2016 and the Mental Healthcare Act, 2017 that offer guardianship provisions to manage an incapacitated person's property, obtaining guardianship can be complex.

There is no standardized procedure.

"The absence of a unified law addressing access to an incapacitated person's accounts leads to varied procedures based on the type of incapacity, often complicating the process and opening avenues for exploitation by dishonest agents," says Sumit Agrawal, managing partner at Regstreet Law Advisors and a former Securities and Exchange Board of India (Sebi) officer.

A simple solution is having a joint holding with a reliable family member with an either-or survivor' clause. Married couples commonly do it, but this cannot be an option for everyone.