December 21, 2025

For a layman, nominating someone to receive funds from any financial asset after one’s death normally means that one has assigned the title of that asset to the nominee. But that is not the legal position. In India, as in common law from which British and hence Indian laws were derived, a nominee is held to be a trustee and not a legatee. Hence, he is supposed to hold the proceeds as a trustee and such proceeds are to be divided among all legal heirs of the deceased as per will or as per succession certificate if the person dies intestate.

This position was reiterated by the Supreme Court in the recent case Indrani Wahi V. Registrar of Cooperative Society and Ors. A deceased father had nominated his married daughter to be made member of the cooperative housing society after his death and be the nominee of his flat there. The apex court, as also the high court before it, clearly stated that mere nomination did not devolve the title of the property to the nominee. While the nominee was entitled to possession of the flat, she could not dispose it off without the express permission of other legal heirs of the deceased.

Hence, when someone wants to devolve title of his assets to his heirs, succession planning is essential. Expert legal advice should be availed of and assets should be demarcated to preferred legal heirs accordingly. If someone else, other than to whom title is to devolve, is nominated in a particular asset the nomination should be changed to avoid complications. It is the duty of everyone to arrange his affairs in such a way as to make his legal heirs split his property in the way he or she intends, without any legal complications.

In India regressive social thinking prevents persons from making a will. This gives rise to legal complications and fighting among heirs that could have been avoided if there was a will. Though awareness and changing social mores mean that more and more people are now making wills, it is something that should be made mandatory for persons over 60 years of age. To avoid costly legal fees, such wills should be in a standardized format and digitalization should be made compulsory. There should be depository, on the lines of NSDL and CDSL that keep record of dematerialized shares, where such wills could be kept. There are many issues relating to the functioning of this system, but that can be addressed by the law commission or even a special committee set up for it. But it is something that deserves to be looked into.