Nominated person will not get property: Busting the myth
Let’s understand this with an example…
If a person nominates his eldest son for his bank account and other properties, and he passes away. The eldest son who believes that nomination makes him the owner of the said assets and takes control of the account and the property. But after a while the younger son comes with the father’s registered will, which clearly leaves the apartment.
Now the controversy starts.
It is one the most common wrong legal belief in India that Nominated person is the owner.
People often believe that it is practical and safe to nominate someone, that by nominating a dear one, we have sorted our real estate issues and now we have our successor. But in legal reality, a nominated person is not a successor.
Let’s understand this.
Who & what is a nominated person?
A nominated person is just what you appoint to receive your asset/property after your death. Think as caretaker or trustee for a nominated person. Their legal duty is to keep the property in trusting until it is transferred to the right owner – legal heir.
It’s like asking the courier office to take your package and deliver it to someone. They collect it keep it with them until it is delivered to the right owner. But the package doesn’t belong to them. They are just a temporary holder.
Where do we usually nominate someone?
- Bank account
- Fixed deposit
- Life insurance
- Mutual Fund / Share (under Company Act)
- Property (especially in cooperative housing communities)
In all these cases, the role of nomination is just to obtain property by your death. But the final ownership is governed by your will, or in case there is no will, then the succession law applies.
The main reason for confusion here is that the process looks so simple and easy.
You fill a form, add a name as a registered, and it gives the impression that you have taken care of succession. Most banks and communities also encourage you to do so. But the form does not override the laws of succession or the will.
This is the place where people get confused between nomination and inheritance.
How to avoid such confusion in future?
Make a will.
When there is a Will, it overrides the nomination. It eliminates the confusion of who is going to inherit. Making a will is very important as it reflect your actual intention and gives clarity, it helps in avoiding disputes that may arise due to confusion among your loved ones, its gives peace of mind to the testator, helps in passing the legacy smoothly.
Don’t leave your legacy on assumptions make your will, because it is not just about money or property it’s about leaving your legacy without any dispute, without a Will, your wishes/intentions may never reach your loved ones. A simple and well drafted Will can save your family from log legal battles and headache.
When a person dies (without a will), the property goes to its legal heirs according to personal succession laws:
- Hindu -succession law for Hindus
- Indian succession law for Christians and Parsis
- Muslim personal law for Muslims
In all these cases, the nominees do not receive a special privilege. The law determines how the property is divided.
Conclusion
Nomination is a practical tool for the convenience, but it is not a replacement for succession plan or a Will.
The nominee is appointed only to facilitate he is not the one to real inheritor, heirs are the real inheritors.
So, don’t get trapped in these myths, and don’t leave your loved ones in legal void. Make a Will.
Plan today so that tomorrow is there to cherish memories not to worry about any legal disputes.
Plan you Will, so that there are no legal bills.