We all save money to ensure that our future life continues to remain as smooth as it is today. We care a lot to ensure a continued comfortable life for our loved ones, even if we were not around. We want the show to go on without any compromises on our present lifestyle. Each one of us does this in various ways and acquiring assets as we go along living our life. We acquire Real Estate, invest in Stocks, Bonds, Mutual Funds, Gold, Diamonds, etc. to ensure we accumulate wealth and at the same time preserve its value over time.
But, how many of us actually understand, or have put a thought to what happens on the day we do not return home?
How many of us have put in a serious thought and answered the following questions:
- Who should receive my Assets?
- How should my liabilities be settled?
- How should my assets be apportioned / utilised?
- Have I registered a nominee in all my investments?
- If so, is the nominee trustworthy? Will the nominee be able to distribute my assets to my legal heirs as planned by me?
- Have I written a will to let the world know my mind?
At this juncture it is essential to bring about a clarity on the subject of nomination.
Most of us are of the opinion that we have done our bit, once a nomination is registered on the Investment document. But, seldom do we realise that the legal position of a nominee is that of a trustee to discharge the various investment houses, and hold the wealth in trust, only to be passed on to the legal heirs of the original owner of the asset, in a manner considered justified by law or as per the valid will document.
Even in the case of an absence of a will document the legal heirs can seek recourse to law to ensure final possession of the assets. A nominee is merely a trustee and not the owner. He/she may temporarily possess the money, but will have to hand it over to the heir when the situation arises.
The only exception to the above rule is in the case of shares. Wherein, the Companies Act transfers all ownership rights in favour of the nominee.
The following is a Link to the column that appeared in the Business Standard clarifying this stance.
So, it is high time we realise that we need to review our Investments portfolio, for a change, from a nominations perspective and support our thouthts with a valid Will Document.