We Indians live in Future. We are more concerned to secure our future and future of our children. The savings rate in India is 35% which is much higher than world average. Gold & Property are 2 most popular investment modes. Whatever we earn during our life time, we assume and take it for granted that it will be passed on to our loved ones after our death. Unfortunately We are Wrong and Life is not that simple. It is very important to understand and ensure that after our death, our assets/funds are smoothly transferred to our loved ones without much hassle becoz Legal processes in India are too complex and time consuming therefore it is important to know the difference between Nomination and WILL.
On Personal Finance front, Most of the people normally get confused between Nomination and WILL. General misconception is that i have availed nomination facility for all my investments and i don’t need WILL. I would like to add in simple words that Nomination is only a Right to Receive & Hold the asset/funds Whereas WILL is the Right to Own assets/funds. WILL super-cedes not only Nomination but Indian Succession Acts like Hindu Succession Act. In case of Equity Shares, Nomination is the final Right to Receive, Hold and Own in the absence of WILL i.e. in case of equity shares, Nomination super-cedes the Indian Succession Act (In the absence of WILL).
To simplify, lets take example of Person A, He has a life insurance cover and he made his brother Nominee for his insurance policy. Unfortunately he died & in his WILL he expressed his desire to pass benefit of his Insurance policy to his wife (Legal Heir). In this case Insurance Provider will pay to the Nominee i.e. his brother. Nominee cannot use the funds received as he is only the Trustee of funds received but not the rightful owner of funds. In short, Nominee has right to receive and hold the funds but he does not own the funds. As per the WILL of the Person A, his brother will pass on the funds to the Legal Heir of the Person A as per his WILL i.e. Person A’s wife (Who has right to own). In case Person A has not left any WILL then the funds/assets will be distributed as per Indian Succession Acts.
Now next question arises why do i need Nomination, i will only make a WILL as WILL super-cedes Nomination. Answer is you need both Nomination and WILL for smooth transfer of your Assets/Funds. Transferring of Funds/Assets is basically a 2 step process
Step 1: Nomination ensure smooth transfer of funds from Bank or Financial Institution to the Nominee of deceased person’s account.
Step 2: WILL ensure smooth transfer of funds/assets to Legal Heir as per the wish of the person
Beneficiary in Step 1 and Step 2 can be same or different. Nomination ensure hassle free transfer of funds else your legal heirs have to go through super tedious process of providing Death Certificate, Proof of relation, Probate etc. Imagine, if investment of deceased person is with 10 different banks/financial institutions then the kind of efforts required. Its better to avail nomination facility for smooth transfer of funds to Nominee and then from Nominee to legal Heir through WILL. Hope i explained difference between Nomination and WILL in simplistic manner.
Conclusion:
1. It is advisable to avail Nomination Facility for all the Financial Investments including Savings Account, Mutual Fund, FD’s etc.
2. Irrespective of you age, you should make your WILL as soon as possible. You can make a WILL even on plain paper and can change it as many times as you wish during your lifetime. In my next post, i will explain How to make a WILL?
3. In ideal Scenario and to avoid any legal dispute in future, You should Nominate and make a WILL in favor of same person only e.g. if you have a savings account & you wish your wife to be beneficiary of this account. In this case make your wife as Nominee of Savings account and in the WILL clearly mention that your wife will be beneficiary of funds in Savings Account.
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Property distribution will take place as per last Will available. Will always super-cede Nomination i.e. if in a Nomination name of 3 Children are mentioned & in a Will name of 3 Children & Grand son is mentioned then Property will be distributed among 3 Children and Grand son as per WILL.
My uncle had made will on my brother’s name on year 1995, after one year he died, his 2 daughters who are married wants this house which is already given to my brother as per will, now the question is who is real owner of this property, and is there any restriction if my brother wants to sell this house.
As the property is transferred to your brother through WILL therefore Hindu Succession Act is not applicable in this case and daughters of your uncle don’t have any rights in the property.
Your brother is the Absolute owner of the property and he can sell the house without any limitation or restriction.
Thank you so much for your valuable reply.
I have one Question….which is more complex jst tell mi waht shall i do to comeout…
My grand- father has made a will on year 2000 in that will they made property distribution among 3 children and one grand son at same time they filled a nomination form which contains 4 members as above.but in 2009 they change their nomination form among 3 childrens .and removed a grand son ..then tell mi now how property distribution takes place…..
my step grandmother made a nomination in favor of his grandson and after death and after 15 to 20 yrs i got will in my dad’s favor with 1 witness alive now the society is not transferring in my name as it is not registered and now i have gone to civil court… can u pls explain me can i hve chances of getting my flat back on my dad’s name and (i only stay in that flat frm last 30 yr and also with step grandmother) pls help me
My apologies but your query is not clear. Please let me know who is grandson and how he is related to you. Also by nomination you mean bank account nomination or Will on plain paper. The will in your Dad’s favor was executed by whom your step grandmother or someone else. In whose name currently the flat is registered. Please share complete details
what happens if will and nomination both are exist?and both are contradictory!what will be the final?
WILL supersedes Nomination. Nominee is just the custodian but inheritance is decided by the WILL.
thanks for the reply for the clarification between nomination and will.Deputy collector denies to take action as per will to transfer the property.please guide me where to appeal against deputy collector’s decision.Is it advisable to appeal in civil court?
If the court has granted probate in your favor then no one can refuse transfer of property in your name. You can appeal in CIVIL court regrading the same.
Can probate be contested by a legal heir or is it the final verdict?
Probate can be contested but there should be very valid reason for the same.
Thank you
i have another question….property owner made the will in 1995.thereafter he made the nomination in favor of his spouse and two sons in 2012.now my question is whether the will is valid or the nomination letter?the owner has made only one will.
It depends on content of Nomination Letter. A WILL can be executed on a plain paper also and may be what you are referring as Nomination letter is the last WILL of the person. Depending on content of Nomination Letter, court of law can except it as a WILL. I would like to check, has the court granted Probate of the WILL. If yes then who is beneficiary. Under Section 213 (1) of the Indian Succession Act, 1925, a WILL cannot be executed till court grants probate (if the deceased person left a WILL)
I read somewhere that for shares related demat account, the Nomination supercedes everything as per company’s act and some court judgement. Is that correct?
As i mentioned and explained in my post that in case of equity shares, Nomination supercedes the WILL.
My grandfather nominate his daughter s in the bank account of FDRs but at the last moment he wrote a will in favour of his son. Now his son got a sucsission certificate from the court but his sisters taken a stay over the FDRs. Who is the write person to receive that FDRs.
Your Grandfather’s SON.
If his daughter prove that WILL was executed under force or coercion then amount will be divided as per Hindu Succession Act as the WILL will be declared null and void.
My Grandfather has made nominee His wife for His Govt housing Co operative Society Flat in Gurgoan at the time of Registration . After the Allotment of Flat he made his will for the same flat in the name of his 02 sons equally. pls adive who will be owner of that flat.
Latest WILL will be legal and guiding document therefore 2 sons will inherit the property.
My Father-in-Low died last year and he heed one Fix deposit in a multi state co. Society and he had nominated my husband in the F D in Pune certificate. Now my brother-in-low is objecting to this under sec. 372,378,283 and is asking for his share in the above mentioned F.D. Please guide.
You have not mentioned whether your father in law left any WILL or assets will be divided based on Hindu Succession Act.
मेरे दादा जी मरने से पहले सहारा इंडिया में एक फिक्स्ड डिपोजिट अपने ही नाम से किये जिसका पपेर मेरे छोटे चाचा के पास है वे पेपर नहीं देते हैं और जब इसकी जानकारी हम सहारा इंडिया से भी मांग करते हैं तो वो भी देने से मना करता है इस सम्बन्ध में किस प्रकार की कानून प्रक्रिया की जा सकती है मैं ये भी बताना चाहता हूँ की नॉमिनी में मेरे चाचा के लड़के का नाम है क्या हम सभी का इस FD पर कानूनी तौर पर हक है कृपया इसकी जानकारी अवश्य दें
अपने दादा इस मामले में तो उनकी मृत्यु के बाद उनकी संपत्ति के वितरण के लिए किसी भी कानूनी दस्तावेज नहीं छोड़ा है , तो अपने दादा के सभी कानूनी उत्तराधिकारियों सावधि जमा पर कानूनी अधिकार है। अपने चाचा के बेटे सावधि जमा की संरक्षक है । अपने दादा के कानूनी वारिसों की सावधि जमा के लाभार्थी हैं ।
Sir,
A huge thanks for your domination to our society for helping us out.
My query is we I and my brother is living with my meternal grandmother(naani) and she had the childrens 2 females and one male one of those female is my mom now my naani wanted us to succeed her property and her son is living on othr floor of the property and we know that he seeks for the property now about the prop it was bank loaned by my Nana and after his death the family member signed the prop in the name of my nani so can she transfer this prop to our name plz assist me with this ASAP Email hsrs2101@gmail.Com
Your naani can either execute a WILL or gift deed to transfer property in your and your brothers name.
Hello Sir… A big thanks for putting this post…
My query is that… My grand father has kept some FD in some banks… And in all the nominee is some one from his wife sides relatives… But in his will he has mentioned abt all FDs to my mother… Can my mom withdraw the amt after the maturity of the same… Or even before the maturity of the same…
Regards,
Ajay
As i mentioned in my post that WILL supersede Nomination therefore your mother can inform the bank regarding the same and can withdraw the FD amount being a beneficiary of the WILL.
But in the will he has mentioned that all the saving accounts and deposits but not the particular word “fixed deposit”… Can she still take the FDs…
Regards,
Ajay
FD is included in deposits.
Thanks for the info…
Regards,
Ajay
Another question… Is what and all documents r required for withdrawing FD from the account… And is the NOC required from nominee of the FD…
Regards,
Ajay
You need Probate and KYC of the beneficiary. Also check with bank if they need any additional document.
Thanks again…
Hi, My father has self acquired residential house. My mother is nominated in society’s record. He did not prepared any WILL and died. I have one married sister as well. Can society transfer the title of residential house in name of my mother only? Or it shall be equally among 3 of us.
You need to obtain succession certificate and depending on that property will be transferred. For example, if you are Hindu then succession certificate will be issued as per Hindu succession act.
Hi Nitin, Few days back we found the WILL prepared by my father. Widow of his close friend had given it to my mother. According to the WILL house Property shall be trf to my Mother till she remain alive and thereafter to me. Can my mother get it transfer to my sister’s name through WILL or it can be trf to me only as per my father’s WILL.
Your mother cannot transfer to your sister. It will be transferred only in your name.
Thanks a lot.
A and B made D their nominee..both A and B died .C ,son of A serves legal notice and objects payment to nominee..what will happen
You have not mentioned the asset class you are referring to. Also the relation between D and A & B. Only in case of stocks and debentures, nominee inherit the asset. In rest all other asset classes, nominee is only a trustee of the funds. The wealth is distributed as per Hindu Succession Act in the absence of WILL. In case of insurance, if the nominee is immediate family member then they are direct beneficiary.
hlo sir,
myself jaspreet singh, my father had an account in co operative society, he make my cousin nominee of the account. after the death of my father in 2012 bank manager released all amount to my cousin sister in 2013. even bank officials did not inform me about it. i m only legal heir of my father, can i challenge nominee or bank officials. plz help me providing info abt this. i will be very thankfull to you for this
You have not mentioned whether your father left any WILL or not.
Hello,
My father has one brother and two sisters(A and B). Due to an unfortunate incident one of the sister A passed away. Sister A’s husband passed away before her and also she did not have any children. There is a flat in the name of sister A,the deceased. We have gotten to know that the other sister B is the nominee of the flat which makes her the trustee of herA flat, however we are unsure of a presence of will.
My question is
1. In case there is no will then will sister B get everything? How does the succession act play out considering sister B has one daughter?
2. In case there is/was a will and is destroyed/lost, can it be recovered?(No, I do not know her lawyer or witness or if the will was registered or not)
1. No. The property of sister A will be decided based on succession certificate i.e. legal heirs of sister A will get the share in the property.
2. It is difficult. If it was registered then you may get a copy from local sub registrar office.
If a person is making a will in favor of his / her son’s name and in case of unfortunate death of the son before the person who made the will, will the Will’s right pass over to the son’s family ? Or can a clause be added in the will so as to transfer the rights to the Son’s family ?
If the WILL is executed by Person A in favor of Person B and Person B die before the WILL is executed/invoked then the family of Person B will not have any rights on the wealth of Person A. In this case, Person A should change his WILL and execute fresh WILL in favor of family of Person B.
Hi sir
I am planning to buy a duplex property
If I add my wife nominee of property & after something happens to me,will this property transfer to her directly as owner or other relatives can claim on it
And if i add her name in property then what will be the scenario
It is not clear where you will declare your wife as nominee. The best way to inherit the property is through WILL.
Please update this or you will be misinforming the public. Since a 2015 Bombay High Court ruling, nomination in the case of equity shares cannot supersede succession laws. The older 2010 ruling in the Mrs Kakote case about nomination was declared per incuriam (bad in law).
The judgement of a high court is case specific and it does not supersede the law or act. You can always quote reference of any court judgement to support your case against the law or act. Only the ruling of Honorable Supreme Court of India can strike down/supersede the provision of a law or act.
I am 61 years senior citizen and live alone in my flat therefore i want to mortgage my 1BHK flat at Palghar East. to Unionj Bank of India but loan manager wants nomination my son and wife have deserted me so what is the proceedure can any one quide me urgent please
Normally in loan against property, bank becomes the nominee of the property. You may clarify from bank the purpose for which nominee is required.
MY FATHER IN LaW has died before three years ago, without making any nomination or will of flat no 602, , i need to know in this case can my mother in law sale the property as she is senior citizen and suffered from cancer and brain hamrenge , pls do let me know bcoz her daughter and son in law are pressurerising her to not to live in said flat no 602, pls help me out
To sell the property first the property should be transferred in the name of legal successors of your father in law. For that his family can apply for succession certificate. Based on that property will be transferred in the name of successors and then it can be sold.
See there is a person A who nominated his house to his sister in housing board application form and died without any will. His wife has possession of that house but she can’t sell as per nomination. Can she file a law suit for succession and if she does so what would court decide ?
Person A’s wife can stake claim on the property. The court’s decision will be based on the factual information and cannot be predicted.
Sir my father has willed his property equally between me and my sister. However my sister is the 100% nominee of the flat. and on that bases she wants to transfer the share certificates in her name. She has not given the will copy to the society. In that event if I give the will copy to society and ask them to transfer share certificates in joint name is it possible?
WILL supersede the nomination. You may obtain probate from the court and then transfer the property in joint name with your sister. Based on sale deed, the share certificate will be issued in joint name.
At the same time, you can submit copy of WILL to society and request society to stop the transfer of share certificate.