Introduction
In order to name the custodians of our assets it is imperative that we know the meaning and legal implications of appointing them. Nominees and legal heirs have been clearly given their roles and responsibilities as per law and the article below elucidates the legal standpoint of each of them.
What is a nomination?
In the legal context, nomination is only a provision for the claiming of property by the nominee as ‘custodian’, in case of the death/ demise of the owner of the property. However, there are some key aspects to note in this scenario:
- The nominee can only claim the property in case of death of the property owner;
- He/ she will only be the trustee/ custodian for a temporary duration, until the establishment of the legal heir to the property/ estate, as per the Succession Act (or Will);
- Thereafter, the nominee will hand over the property/ estate to the legal heir/ heirs, as per the law;
- The nominee and legal heir are different parties; the nominee may be the legal heir in case he/ she has been nominated for assets/ wealth, while his/ her name is also declared in the will as the clearly stated legal heir; and
- Minor children may have guardian nominees who will hold responsibility for looking after the welfare of these children and safeguarding their share of the wealth of the deceased. A family trust or private trust may also be created for the benefit of children and legal heirs, in many cases.
Who is the legal heir?
The legal heir, as opposed to the nominee, is the individual who has the right and entitlement to succeed to the wealth and property of the deceased individual, under the signed legal will else personal succession law applicable. The legal heir will be mentioned clearly in the will by the person deceased, as the key inheritor. The legal heir can be one person, or multiple persons as well.
A will is an important document that specifies the intentions of the testator to distribute the assets. In case a will is not made, then the Indian Succession Act, 1925 or religious Acts such as the Hindu Law or Muslim Law will apply.
If there is no will or stated legal heir, the property will be equally distributed as per the Hindu Succession Act, 1925.
Conclusion:
According to the Indian law, the nominee will receive and hold the property of the deceased until the nominee is legally bound to transfer or distribute it to the legal heirs of the deceased.
Also, an individual must ensure he/she creates a will even if nominations have been made. It is also prudent to ensure that the contents of the will are harmonized. From a practical perspective, it is good to have the same persons as the nominees and the legal heirs under the will.
The content of this article is intended to provide general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
