If the account holder dies without naming a nominee, who will receive the money in the bank account? Many people need to pay more attention to the importance of nominating beneficiaries for their bank accounts.
However, having a nominee for every account can prevent various complications. Let’s explore the benefits of naming a nominee.
Designating a nominee is advantageous for any financial asset, such as bank accounts, demat accounts, LIC policies, properties, bonds, or shares.
If a person passes away without nominating a beneficiary for their bank account, there can be uncertainty about who will disburse the funds.
In reality, in the event of the account holder’s death, the funds deposited will be transferred to the nominee. Upon the account holder’s demise, the entire sum deposited will be allocated to the designated nominee.
An individual may designate multiple nominees, and an equal share can be allotted to each nominee. Many banks offer this option.
Moreover, it is possible to specify the proportion of the funds that each nominee is entitled to receive after the account holder’s demise.
Understanding the significance of nominees: For example, if an individual names their wife, mother, and sister as nominees for their bank account, in the event of the individual’s death, the funds deposited in their account will be equally distributed among their wife, mother, and sister.
In another scenario, an individual designates three nominees for their bank account. During the nomination process, the deceased expressed the wish that in the event of their death, 50% of the funds deposited in their account should be given to their wife, and the remaining 50% should be split equally between their mother and sister.
In this case, if the individual passes away, 50% of the funds in their account will go to their wife, and 25% will go to each of their mother and sister.
If there is no nominee, who owns the money in the account? If an individual fails to nominate a beneficiary for their bank account, the entire sum deposited in their account will be passed on to their legal heir upon death.
The legal heirs of a married person include their wife, children, and parents. If the deceased account holder is unmarried, their parents and siblings may claim as legal heirs. If there is no nominee, various documents must be produced.
How to claim the funds? If the account holder dies without naming a nominee, their legal heir will inherit the sum deposited. The legal heir is required to visit the bank branch with essential documents such as the death certificate, a photo of the legal heir, and KYC documentation.