Nominations are not enough; you must create a Will!

Photo by Melinda Gimpel on Unsplash

Most people believe that the nominee of a bank account inherits the funds if the account holder dies.

The legal position, on the other hand, is different.

Multiple court decisions and RBI notifications have established that “a nominee acts only as a trustee on behalf of the rightful legal heirs.”

They hold the property/asset until the succession or inheritance issue is resolved by law.

Nomination helps the financial entity (Bank/MF/Insurance Company) in a smooth discharge of its responsibility through the transfer of the financial asset to the nominee. However, the nominee does not own the assets and only holds them on behalf of the legal heirs.

A valid Will, created by the asset owner, is the final arbiter to determine the inheritor of an asset.

In the absence of a valid Will, legal heirs are determined by various laws such as the Indian Succession Act, Hindu personal laws, etc.

Except for insurance policies, where a new concept of “beneficial nominee” was introduced in 2015, the rules apply to all types of assets.

Even the “beneficial nominee” feature, however, has some limitations.

Bottom line: The best way to ensure that your assets are distributed according to your wishes is to draw a comprehensive will covering all your movable and immovable assets.

This post was created with Typeshare

--

--

--

Driven to Learn. Driven to Improve. Driven to Share. Excel and Personal Finance enthusiast.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

No Poorly Defined Problem Was Ever Solved

Investing.

A better way to structure your portfolio

How To Stop Spending Money On Things You Don’t Need

A guide to renovating rentals

Tips for First-Time Homebuyers

How Investors Can Drive Change and Contribute to a More Sustainable World

2021 Investment Performance

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
37xBetter

37xBetter

Driven to Learn. Driven to Improve. Driven to Share. Excel and Personal Finance enthusiast.

More from Medium

Monthnotes — February 2022

PumSwap

All the details on Lamborghini’s first NFT series

End of the Season Power Ranking