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2024-10-04 23:32:36
New Delhi: Rohit (name changed) was on a senior post in a private company. He had taken life insurance worth Rs 30 lakh. Besides, he also used to invest money in the share market. He died in an accident. When his father went to the insurance company to collect the insurance money, he did not get the money. The reason was that Rohit had not written the name of his nominee in his insurance.
Similarly, he did not even get the money for the shares, because there was no nominee in that too. Later he had to take the help of a lawyer. After a lot of rounds of courts, he got his son’s money. This cost both money and time. That problem is different.
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Who is the nominee?
Nominee is a person who can withdraw money from the account after the death of the account holder. This person can be a family member or a friend or an acquaintance. The account holder can change the name of the nominee from his account whenever he wants. Many people also write the name of some organization as a nominee. A nominee is completely different from a will. In the will, that person becomes the owner of the property of the account holder, whereas the nominee is not necessarily the owner.
Nominee is not the owner of the property
The nominee is not the owner of the account holder’s property but is the caretaker. If the nominee is the sole legal heir of the account holder’s property, then he can keep that property with himself. Whereas if there is no legal heir, then it is his responsibility to distribute that property among the legal heirs of the deceased.
After the death of the account holder, the bank or other financial institution gives the amount deposited in the account to the nominee. After this, it is the responsibility of the nominee to deliver that amount to the heirs of the deceased. If he does not deliver the amount to them then the matter becomes between the nominee and the heirs of the deceased. The bank has no role here.
When to add nominees?
The name of the nominee must be mentioned in the bank account, policy, insurance, demat account, locker, FD etc. Actually, any person’s name can be written as a nominee. But experts say that after the death of the account holder, the family members do not get into legal trouble, it is better to get the name of the person who is the legal heir registered. If you have opened an account and have not registered your nominee’s name, you can still do so. You can also get the name of more than one nominee written in the account.
These complications can occur if there is no nominee
- The bank or insurance company will not give the amount of the deceased to any member of his family. The bank can ask for papers issued by the court for the legal heir.
- Many times a distant relative or unknown person also declares himself the heir of the deceased. In such a situation the matter becomes more complicated.
- If there is discord among family members, the matter goes to court. It may take 6 months or several years for its decision to be taken.
- To ensure that family members do not get trapped in any legal entanglement, get the name of the legal heir written as a nominee in your account today itself.