Stories
Does a nominee own the property? What the law says about legal heirs
- •A nominee and a legal heir are two different things, and being a nominee does not automatically grant ultimate ownership of the property.
- •The primary purpose of a nominee is to simplify the process of receiving funds from financial institutions after the account holder's death.
- •If a valid will exists, the property and money must be distributed according to the will, favoring the legal heir rather than just the nominee.
- •In the absence of a will, property rights are determined by the applicable inheritance laws governing the individual.
- •It is crucial to update nominee details regularly and draft a valid will to prevent family disputes over assets.
Key Questions Answered
A nominee is designated by an account holder or investor to receive funds from a financial institution after death to simplify the process, acting essentially as a custodian or trustee. Conversely, a legal heir is the person entitled to inherit assets under applicable succession laws or through a valid will, possessing the ultimate ownership rights to the property.
No, registering a name as a nominee does not automatically give that person ultimate ownership of the funds or asset. While financial institutions hand over money to the nominee first to streamline asset transfer, the legal right to the money depends on a valid will or applicable inheritance laws.
If a nominee's name is different from the person designated in a valid will, disputes can arise. The nominee cannot keep the money solely based on their nomination status, as the assets must be distributed in accordance with the valid will and proper inheritance laws.
