Nominee-Every time you fill up a form for an investment, whether it’s a Fixed Deposit or Insurance, Shares or a Mutual Fund or even if you’re opening a new bank account or any government schemes, there will be a separate section that will ask you to mention a Nominee. This column is often left blank by a lot of people who are investing or opening an account, but it shouldn’t be left. It’s very important for the future. Today we will tell you how important Nomination in our life.
What is Nominee/Nomination? Nominee Meaning
Nomination is a facility that enables a deposit account holder, investor in mutual fund/other financial instruments or safe deposit locker holder to nominate an individual, who can claim the proceeds of the deposit account, investment or contents of the safe deposit locker, post the demise of the original depositor, investor or locker holder.
#Who can be a Nominee
The Nomination can be anyone you deem to be your first relative – your parents, kids, siblings, Spouse (life partner) and some other family member or a special friend but government allows for a Nomination only blood relation. Some investments also allow you to have multiple nominees where you can assign percentages of your money to each one of them. If you don’t specify percentages, it is shared equally.
Why Nominee is Important
The Nomination has a real role after the death of the owner of the property, bank account, schemes, etc. In the absence of a Nomination, it is very difficult to get money. if the Nomination not present at the time, the money can be stuck for a long time. it takes a long time to achieve them in legal tricks. But the process becomes easier when the nominee present at the time of the case.
Where the Nomination is Required
While taking the life insurance policy while taking the necessary insurance. here you can more the one Nomination. you can nominate your parents, life partner, or your children. in the insurance, it is better to make a legal heir a nomination.
#Bank Account Opening
While opening a bank account, you can also make a relative or friend a Nomination while opening bank account, is not necessarily the legal heir. Only one person can make a Nomination.
The joint account gets the amount in the joint holder first and then the Nomination gets it.
It is important to make a Nomination while making a fixed deposit or while investing elsewhere. Here you can make only one person for Nomination. Multiple nominees can be appointed in an opening Demat Account. Here the Nomination is not only the caretaker, but also the owner. The Nomination does not have to transfer the shares to the legal heirs.
You can make more than one nominee in a Mutual Fund. If you want, you can also distribute shares for them. If a Nomination has to be mentioned in the form.
The will and succession law work to appoint a Nomination for the property. The v has no special role in the property. If you live in a flat, it is necessary to appoint a Nomination.
Apart of this Nominee also important in many government schemes. Before Submit your form mention there your Nomination behalf on your decision.
Rules of Nomination
- It is necessary to appoint Nomination minor then guardian.
- More than one Nomination can be appointed.
- you can change the Nomination multiple times.
- The nominee’s is not always entitled to the property.
- It is important to make a will even after making a Nomination. If the Nomination is there but not the property, then the property is divided according to the law.
As per the new law, if any immediate family member (like spouse, children or parents) is made the Nomination, then they will automatically become the beneficial owners of the claim benefits and be referred to as ‘Beneficial Nominees’.
This means that the death benefit will be paid to Beneficial Nominees and not to any other legal heirs, irrespective of anything.
It is worth noting that only the immediate family members can be appointed as the Beneficial Nominees. Therefore, it’s always advisable to nominate an immediate family member as the Nomination to ensure that there are no disputes in future between the nominees and legal heirs.
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