Nomination vs Will: Why Your Nominee is NOT the Owner

The Dangerous Myth

Ask any Indian: "Who gets your Bank FDs and Flat after you die?" They will simplify say: "My Nominee (Wife/Son)."

This is LEGALLY WRONG. The Supreme Court of India has clarified multiple times: "A Nominee is merely a Trustee, not the Owner."

The Role of a Nominee

Think of a Nominee as a "Watchman".

• •Bank's Job: The Bank does not want to hold a dead person's money. They want to give it to someone trusted and close the account.
• •Nominee's Job: Take the money from the Bank, hold it safely, and distribute it to the Legal Heirs.

If your Nominee keeps the money for themselves, the other Legal Heirs can sue them in court and WIN.

Chapter 1: Nomination vs Will (The Showdown)

Scenario:

• •Father dies. He nominated his Son in his Bank Account (₹1 Crore).
• •Heirs: He has a Son, a Daughter, and a Wife.
• •Result: The Bank gives ₹1 Crore to the Son. The Son thinks "It's mine!".
• •Legal Truth: The Daughter and Wife can claim their share (1/3rd each) under Hindu Succession Act. The Son MUST pay them.

Chapter 2: The "Beneficial Nominee" Exception

The confusion was so bad that the Govt recently changed rules for Life Insurance.

• •Old Rule: Nominee is Trustee.
• •New Rule (Beneficial Nominee): If the Nominee is an Immediate Relative (Spouse, Children, Parents), they become the Ultimate Owner. Other heirs cannot claim it.
• •Note: This specific "Beneficial Nominee" concept currently applies ONLY to Life Insurance, not Bank Accounts or Mutual Funds.

Chapter 3: Why you NEED a Will

If you die without a Will (Intestacy), the Government decides who gets your money based on your Religion.

• •Hindus/Sikhs/Jains: Hindu Succession Act (Class 1 Heirs get equal share).
• •Muslims: Sharia Law (Specific complex ratios).
• •Christians: Indian Succession Act.

Do you want the Government to decide? Maybe you hate your ungrateful Son and want to give everything to your Daughter.

• •Without Will: Son gets 50%.
• •With Will: Daughter gets 100%. Son gets 0%. (And he can't do anything).

Chapter 4: How to make a Will?

You don't need a Lawyer. You don't need Stamp Paper.

1. •Take a plain white A4 paper.
2. •Write: "I, [Name], aged [Age], sound mind, revoke all previous wills..."
3. •List your assets clearly (Bank A, Flat B, Locker C).
4. •Write who gets what. "Everything to my wife".
5. •CRITICAL: Sign it in front of 2 Witnesses. (Witnesses cannot be beneficiaries).
6. •Get Witnesses to sign.
7. •(Optional but Recommended): Register it at the Sub-Registrar office for ₹100-500. A registered Will is very hard to challenge in court.

Conclusion

Nomination allows "Access" to funds. Will determines "Ownership" of funds. You need BOTH. Check your Nominations today. Write a Will this Sunday. It beats leaving a legacy of court cases for your children.