What are a nominee’s rights to investments?
NEW DELHI: Keshav Singhania & Roopal Bajaj
-Atit Dalal
A nominee is not the legal owner of such asset and can only hold the asset in fiduciary capacity for the benefit of the legal heirs, either determined by way of a will or as per relevant succession laws.
In essence, a nominee is an individual appointed by the asset owner to hold the asset in good stead as an interim arrangement, until duly succeeded by the legal heirs and at no point has absolute title to the asset. Legal heirs are the rightful economic owner of the assets of the deceased. A nominee’s right will be on a lower pedestal vis-à-vis the rights of a beneficiary under a will and a will would prevail over nomination.
Fixed deposits and bank accounts can be held singly or jointly. Joint holding (in case of two or more than two holders) is functional via ‘jointly’ or ‘either or survivor’ or ‘former or survivor’ and ‘anyone or survivor’.
In the event of death of one of the fixed deposit/ bank account holder, the proceeds will be transferred basis the underlying mode of operation, keeping in perspective that principles of nomination can never override the laws of succession, i.e. surviving holder merely acts as the custodian of the assets until the legal heirs undertake the needful. The same has also been upheld by various Indian courts.
—Name withheld on request
In accordance with the Hindu law, a joint Hindu family consists of all persons lineally descended from a common ancestor and include their wives and unmarried daughters. These family members can further be categorized as members and coparceners.
The concept of Hindu coparcenary, however, is much narrower. It comprises the propositus (the person from whom the line of descent begins) and three generations
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