Stories
What Happens to Bank Account Money If Both Holder and Nominee Die?
- •A nominee is only entitled to receive the money from the bank after the account holder's death and does not automatically gain full ownership rights.
- •According to the Supreme Court judgment in Sarbati Devi v. Usha Devi, nomination and inheritance rights are two different aspects.
- •If both the account holder and the nominee die before funds are released, the bank contacts the legal heirs of the original account holder.
- •Legal heirs must submit necessary documents such as death certificates, succession certificates, and indemnity bonds to claim the funds.
- •Proper financial planning, updating nominations, and drafting a will are crucial to prevent family disputes and ensure smooth asset transfer.
Key Questions Answered
If the nominee received the funds before passing away, the money becomes part of their estate, though original legal heirs can still claim rights. If both pass away before funds are released, the bank contacts the account holder's legal heirs, who must submit documents like death and succession certificates to claim the money.
No, being a nominee does not grant full ownership rights over the funds. A nominee is only entitled to receive and hold the money as a trustee, while the ultimate ownership belongs to the legal heirs according to succession laws or a will.
The Supreme Court judgment clarified that a nominee is merely authorized to receive money from an insurance company or financial institution and does not acquire full ownership of the amount. It established that nomination and inheritance rights are separate, meaning ultimate ownership rests with the legal heirs or a will.
