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Does A Will Supersede Nomination?

In legal parlance, a custodian does not own the assets but keeps the assets in his or her custody till the heir mentioned in the will or the eligible legal heir is identified for owning the asset.

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Amit Sethi
December 25, 2023
Will Supersede Nomination

Will Supersede Nomination

Naming nominees has become mandatory for most financial assets including bank accounts, Demat accounts, mutual funds, etc. Investors often get messages from banks and other investment accounts to update the nominee details. However, such institutions never send a message for creating your will because it’s on you whether you prepare the will or not, which raises the question of is the will necessary or not if you have already selected a nominee or Does A Will Supersede Nomination?

A nominee is selected by an individual, but the legal heir is mentioned by an individual under his or her will. The law identifies the name mentioned in the will as the person who will own the assets. The nominee plays the role of a custodian of your assets. The custodian’s role comes into play when the owner dies.

Difference Between The Will And The Nomination

The difference between the will and the nomination is that the nomination mentions the custodian of your assets who plays their role after your death, while the will contains details such as the rights and authority of the legal heir on your assets. There can be different nominations for different assets for example, you can mention different persons as nominees for your bank accounts and investments, etc. On the other hand, if there are multiple wills written by the testator, it can create legal ambiguity and therefore it must be avoided. The last drawn will is considered legally valid in most cases.

Also Read: Here’s How Nominees, Heirs Can Claim NPS Benefits If Subscriber Dies Prematurely Or Intestate

Which Is Superior?

Naturally, the legal heir is the inheritor of your assets. The legal heir is mentioned in the will. So certainly, the will supersedes the nomination. The right of the beneficiary mentioned in the will shall supersede the right of the nominee mentioned in the nomination.

It can be possible that the same nominee’s name is mentioned in the will as the beneficiary. In that case, the nominee is also the heir and he/she will be entitled to inherit the assets of the deceased person. The law permits the same person to be mentioned in both the nomination and the will.

Both Are Important

While the name mentioned in the will is the legal inheritor of the wealth and assets left by the deceased person, it doesn’t reduce the importance of the nominee mentioned in the nomination form.

The nominee is the caretaker of assets and the law or the will acceptable under the law decides upon the legal heir. A caretaker ensures that the assets and wealth and taken care of till the time it is transferred to its rightful owner. Once the transfer happens, the role of the nominee ends. There is no role for nominees after that.

While it’s mandatory in most cases to choose the nominee, one should also strive to write the will in advance. Life is uncertain and a will if written in advance can help avoid disputes between the beneficiaries and protect their right to legacy passed by the deceased.

 

The author is an independent financial journalist.

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