By Admin 
Nominee Rights: Often people think that if a person’s name is registered as a nominee in a bank account, insurance policy or investment. So after the death of that person, the entire amount goes directly to the nominee. Many people assume that the nominee becomes the real owner of that money. But in reality it is not so.
The name of the nominee only tells who will be given the responsibility of the money first. So that the amount can reach the rightful heirs. That means the role of the nominee is only that of a trustee i.e. representative. Not the owner’s. Let us tell you what are the rules and regulations regarding this.
Does the nominee get the full amount?
The nominee is legally considered a trustee, that is, he is only responsible for delivering the amount or property to the real heirs. For example, if the nominee’s name is registered in any bank account, insurance policy or fixed deposit. So after the death of the person, the institution first hands over the amount to the nominee. But this does not mean that the money belongs only to him. If someone else has the right in the will or under succession law. So that person can make a claim in the court and the amount will be given to him.
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Different rules in different places
The rules regarding nominee are different in every financial institution. The nominee has the right to withdraw only the amount in bank accounts and fixed deposits. But not ownership rights. If the same person is also registered as beneficiary in the insurance policy.
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So he can get the full amount. In case of mutual fund or share investment, the amount is given to the nominee temporarily. But later the real heir can make a claim with legal documents. Therefore, it is important to know how much rights the nominee has in every investment.
Why is it important to choose the right nominee?
Often people do not think much while filling the name of the nominee or enter the name of a relative in a hurry. But this small mistake can become a cause of dispute among the family in future. The nominee should be the one on whom there is full confidence that he will deliver the amount to the rightful beneficiaries. This will neither delay the distribution of money nor increase legal complications for the family.
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