we all make investments. We may be asked to mention “Nominee” at the time of making investments. Some neglect to mention nominee, as they think that it is not necessary.
Meaning of “Nominee”–
Nominee is legal tender to receive money in case the investor deceased during the tenure. All the invested money plus accrued interest would be paid to the nominee. It is also a way to avoid Quarrels among the family members. Although the breadwinner invested amount goes to legal heirs, it is better to appoint nominee to avoid further disputes.
Where to mention Nominee?
At the time of investing, Generally Financial institutions, Banks prompts the investor to mention Nominee. Nominee should be a blood relative. Banks asks to appoint 1 Nominee, where mutual funds allow to share the invested amount up to “3” Nominees. Allocate the percentage of share among the three nominees.
Nominee is a Mediator; Not Bound to entitle properties
Though the investor mentions Nominee, That Nominee acts as a mediator among the successors. The Legal heirs are entitled to have full rights on the assets earned by the breadwinner. If the legal heirs files a case claiming the amount, nominee is entitled to pay that amount. It is as per Indian law to distribute assets among the successors.
So appointing Nominee is not only sufficient, it should be bound to the legal heirs.
Writing a Will- An added Advantage–
It is also important to draft a will mentioning nominees. This is up on discretion of the breadwinner and he can alter/modify the nominees later as per his wish. Drafting a will is a legal process to distribute assets and liquid cash to the legal heirs. So don’t neglect to write a will to distribute your hard-earned money to your nominees.
Generally deceased person’s assets are distributed as per the will. Will is the final acceptance to distribute assets. Breadwinner can modify will as many times as he can. Simply writing a “Will” on a white paper in the presence of two eye-witnesses is sufficient to draft a will.
If the deceased person fails to write a will, the assets are to be distributed according to the Indian Succession Law. This is a long process and it may takes several years to distribute assets among the legal heirs.
So don’t forget to mention nominees and draft a will in your investments. It is at the discretion of the breadwinner to alter nominees as per his last updated will. Writing a Will in the presence of 2 eye-witness would make your legal heirs to transfer assets seamlessly processed. So don’t forget to draft a will. If you didn’t do it till now, do it “Today”.