- 07-Jun-2025
- Cyber and Technology Law
A nominee is a person designated to receive assets or property upon the death of the owner, usually as per the terms of an insurance policy, bank account, or other financial instruments. However, the role and rights of a nominee are often misunderstood. While a nominee holds the legal title to the assets temporarily, they are not always the rightful owner in the context of property and inheritance law. The legal heir typically holds the right to inherit the deceased person's property.
A nominee is primarily a trustee or custodian of the assets, and their role is to facilitate the transfer of assets to the legal heirs as per the deceased's will or succession laws.
For financial assets such as insurance policies or bank accounts, the nominee typically has the authority to claim the amount or asset on behalf of the deceased's estate. However, the nominee does not have ownership rights in the same way a legal heir does.
The legal heirs of the deceased, according to the law of inheritance or the will, are the rightful owners of the property and assets. Nominees are considered as representatives or trustees until the legal heirs come forward to claim the property.
The legal heir has the right to inherit all of the deceased's assets, including property, bank accounts, and personal belongings, irrespective of who was nominated for financial claims.
A nominee cannot automatically transfer ownership of the property or assets to themselves or the legal heirs. The nominee’s role is to assist in the administrative transfer of the asset to the rightful heir.
In case of immovable property, the legal heir has to apply for a legal heir certificate or succession certificate from the relevant authorities to claim the property. If the property is immovable, a nominee cannot transfer the ownership to another person; it must be done through the proper legal channels.
In the case of financial assets like a bank account or insurance policy, the nominee can claim the amount. However, this claim is essentially as a custodian of the asset, and the nominee is required to transfer the funds to the rightful heirs if necessary.
Banks and other financial institutions may allow the nominee to claim the asset after the death of the policyholder or account holder, but they cannot transfer the ownership of these assets to the nominee unless the nominee is also a legal heir.
To transfer immovable property (such as land or a house) after the death of the owner, the nominee must go through the succession process. This involves obtaining a legal heir certificate or succession certificate, which confirms the rightful heir(s).
If the deceased left a will, the nominee must follow the directions of the will and transfer the property according to the wishes of the deceased. In the absence of a will, the property will be inherited by the legal heirs according to succession laws.
In case of a dispute regarding the rightful heirs or the assets, the matter may go to court. The nominee cannot transfer property if there are competing claims from other legal heirs.
If the deceased’s will designates the nominee as the primary beneficiary, the nominee must still follow the legal process of transferring the title and assets to the heirs as per the directions in the will.
From a legal standpoint, a nominee is not the owner of the deceased’s property. Their role is primarily administrative, ensuring the property or asset reaches the rightful heirs.
Nominees do not have any ownership rights to the property unless they are also designated as legal heirs or beneficiaries in the will.
The Indian Succession Act, 1925 governs the inheritance laws for individuals who die intestate (without a will), and it outlines the rights of legal heirs over the deceased's assets.
Similarly, the Banks and Insurance Companies often deal with the nominee as a trustee but ensure that the nominee distributes the inherited assets according to the legal framework or the instructions provided in a will.
A nominee’s duty is to act in the best interests of the legal heirs. If the nominee is not the legal heir themselves, they must transfer the assets to the rightful heirs, subject to the verification of their legal status.
Let’s assume a person named Vikram nominates his cousin, Raghav, as the nominee for his bank account, but his legal heirs (his wife and children) inherit his assets after his death. Raghav can access the account and withdraw the funds, but he is legally bound to transfer the amounts to Vikram’s legal heirs. If Raghav fails to do so, the legal heirs can take legal action to claim the funds.
A nominee can temporarily hold the property or financial assets of a deceased person, but they cannot transfer the ownership to themselves or the legal heirs directly, especially in the case of immovable property. They must follow the legal process, including the transfer of assets through a succession certificate or will, to ensure the rightful legal heir receives their due share. While nominees play an important role in facilitating the transfer, the ultimate transfer of ownership lies with the legal heirs, as per inheritance laws.
Answer By Law4u Team
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