Need for a WILL despite having a nominee.

Life is a mystery. We live in an Era of surprises from both Human and nature. Time gives us the life lessons. Human beings are the most intelligent creations of God. Knowing the uncertainties in life it becomes important for us to make things certain. We are facing the reality, the pandemic now, that has taught us many lessons including taking care of our personal finances that is so important. This is were we have to think how can we set our personal financial matter in a proper way that benefits us not only now but also later so that our loved ones are blessed and benefitted. In this pandemic, it is important for us to set right our personal finance matter and look beyond and think !!

How are financial decisions are going to benefit our loved ones, after us.??

An individual often believes that once he or she has filled the nomination section of his investments, then the nominee automatically becomes the beneficiary of the underlying assets after the individual’s demise.

A nominee is only a custodian of the asset of the demised person and not the ultimate beneficiary of his/her asset. The nominee only has the right to represent on behalf of the owner and does not necessarily have any kind of entitlement over the asset. If something happens to the owner, then the nominee is legally bound to hand over the underlying asset to the legal heir and conduct all the necessary paperwork to effect the same. This rule is applicable to most of the financial assets.

Each of the Financial asset type has different methods of devolution finding its actual got its own eventual owner, and to name few

Asset type Eventual owner

Immovable property – Legal Heir
Shares/ demat A/c -Legal Heir
Corporate deposits – Legal Heir
Bank / Fixed deposit – Legal Heir
Locker control in bank -Legal Heir
Mutual funds – Legal Heir
Employee Provident Fund – Nominee
Insurance – Nominee( in certain cases)

Assets types like bank accounts (all kinds of accounts), property, demat accounts, mutual fund holdings, equity shares, PPF, corporate fixed deposits — the nominee acts like a custodian.   

A person may have a single nominee but can have more than one legal heir, in such a case in order to pass on the wealth in a smoother manner without any hazzle between the legal heirs , it is important for an individual to write a will.

In most scenario, Nominee is decided during the purchase of the financial asset, and we fail to review the nominee when our life takes a huge turns. When a person was umarried at the age of 22 ,he would have had his father or mother as his nominee, which he would have failed to change after his marriage and after having kids at age of 45 years.

A will, a composite document that specifies an individual’s intention to pass on his asset in a specified manner and about who and how much a person is entitled. A will also becomes a document to announce a person’s asset details and the nature of his financial assets to his legatees.

This does not mean that having a nominee is not a necessary one. If there is NO nominee then there is no way the organisation will be able to hand over the underlying proceeds. In the absence of a nominee, the legal heir(s) need to furnish succession certificates, affidavits for each and every investment and to each and every entity with whom such investments / financial assets have been held. 

How to write a will ?

Writing a Will is a simple process. An individual has to list the various asset details and needs to specify who will be benefited with the asset after the individuals demise. Will can also talk about the individuals sentiment over a movable asset and material and how it needs to be handled after his/her demise.

That means for all other assets like bank accounts (all kinds of accounts), property, demat accounts, mutual fund holdings, equity shares, PPF, corporate fixed deposits — the nominee acts like a custodian.   

A person has a single nominee but can have more than one legal heir, in such a case in order to pass on the wealth in a smoother manner without a hazzle between the legal heirs , it is important for an individual to write a Will.

In most of the scenario, nominee is made during the purchase of the financial asset, and we fail to review the nominee when our life takes a huge turns. When a person was umarried at the age of 22 would have had his father or mother as his nominee, which he would have failed to change after his marriage and kids at age of 45 years.

A Will, a composite document that specifies an individual’s wish to pass on his asset in a specified manner about who and how much a person is entitled. A will also becomes a document to announce a person’s asset details and the nature of his financial assets to his legacy.

This does not mean that nomination is not a necessary one. If there is NO nominee then there is no way the organization will be able to hand over the underlying proceeds. In the absence of a nominee, the legal heir(s) need to furnish succession certificates, affidavits for each and every investment and to each and every entity with whom such investments / financial assets have been held. 

Will is not a compulsory registerable document , so a Will written in a plain piece of paper and properly executed and attested by two witnesses will become a valid Will.  But, it is advisable to register a will as a registered Will cannot be tampered with, mutilated, destroyed or stolen. Will needs to be executed when an individual person is in proper mental health.

Though will is simple document to be written , it is recommended to take a legal opinion and hire  an expert especially if there is an anticipation of conflict between the beneficiaries. It is recommended to Review your will every 2 years , and make changes according to how your life takes you.

Author: knshanthi

Advocate by profession and passion.

One thought on “Need for a WILL despite having a nominee.”

  1. Very good post…. Which is need of the hour, everyone need to look into it and review at periodically intervals. It’s good eye opener I have seen so many educated family miss to do so.

    Liked by 1 person

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