You must name a nominee whenever you make any investment or open an account in any government scheme, such as the Public Provident Fund. In case of death, the nominee is contacted and passes them the returns or the ownership of the assets. The nominee is a beneficiary who receives the profits in case of the untimely death of the investor or the subscriber. The nominee can be anyone—a child, parent, spouse, friend—if the person wishes so. Naming a nominee is crucial as life is uncertain, and it gives you a certain degree of guarantee that your family or the people you care about will be taken care of financially.

Also Read: What Happens To Your Property If You Die Intestate?

You can even name different nominees for each type of investment. For tangible assets, you can name one nominee, which will be named in your will, but for investments, you have to mention the person to the institution, such as a bank or the administration. Instead of writing about your relationship, such as your children, spouse, or father, write the name for clarity.

Transfer Of Ownership To The Rightful Heir

The nominee will be the beneficiary of assets left by the original investor after death. After death, the nominated person will get the invested amount, profit and the interest earned. For instance, if a woman subscribes to PPF but dies at 60, the selected nominee will receive the maturity sum. Nomination helps ensure that your investments go to the rightful owner.

No Room For Ambiguity

In the absence of a will, there is always the question of what the person would have wanted. It can lead to family disputes, court cases and you may end up paying exorbitant attorney fees. If you have clearly named a nominee, such a situation will never arise.

Also Read: When Is A Legal Heir Certificate Required, And How Do You Get One?

Avoids Family Disputes

If a person dies without a will, it can lead to family disputes over his property, especially when several relatives feel entitled to the wealth. These cases could drag on in courts for years without a quick or favourable verdict. A proper will helps prevent these unnecessary lawsuits and saves time for everyone. Those who may have many relatives and children with significant wealth must plan their estate via an exit strategy or a will.