What’s the difference between a nomination and an heir?

There are key differences between legal heirs and nominees that you must keep in mind - Nominees do not have the same rights as heirs, and this is what we cover in this article.

Writing a will is very essential if you consider the entire legal ramifications and its sheer importance, from a larger perspective. A will is basically the written declaration made by an individual about the distribution of his/ her assets, wealth and property to beneficiaries or legal heirs, as per his/her wishes. Beneficiaries can include members of the family, other relatives, friends, acquaintances, organizations, charities and so on.

The importance of a will in India cannot be emphasized upon enough, when it comes to safeguarding the interests of family members, ensuring proper distribution of wealth as per the wishes of the deceased; it also plays a big role in preventing any family disputes, legal delays, legal costs and other unwanted situations. One can choose a good online will solution or lawyer, or even make the will himself/ herself.

What is a nomination?

In the legal context, nomination is only a provision for the claiming of property by the nominee as ‘custodian’, in case of the death/ demise of the owner of the property. However, there are some key aspects to note in this scenario:

  • The nominee can only claim the property in case of death of the property owner
  • He/ she will only be the trustee/ custodian for a temporary duration, until the establishment of the legal heir to the property/ estate, as per the Succession Act (or Will)
  • Thereafter, the nominee will hand over the property/ estate to the legal heir/ heirs, as per the law
  • The nominee and legal heir are different parties; the nominee may be the legal heir in case he/ she has been nominated for assets/ wealth, while his/ her name is also declared in the will as the clearly stated legal heir
  • Minor children may have guardian nominees who will hold responsibility for looking after the welfare of these children and safeguarding their share of the wealth of the deceased. A family trust or private trust may also be created for the benefit of children and legal heirs, in many cases

Who is the legal heir?

The legal heir, as opposed to the nominee, is the individual who has the right and entitlement to succeed to the wealth and property of the deceased individual, under the signed legal will else personal succession law applicable. The legal heir will be mentioned clearly in the will by the person deceased, as the key inheritor. The legal heir can be one person, or multiple persons as well.

If there is no will or stated legal heir, the property will be equally distributed as per the Hindu Succession Act, under the following tenets:

  • Equal distribution amongst all Class 1 heirs
  • In absence of Class 1 heirs, equal distribution amongst Class 2 heirs
  • In case of no Class 2 heirs, distribution amongst Agnates and then Cognates
  • In case of no one being present, the Government takes the property/ estate of the person deceased

As a result, it can be seen that the nominee is only the trustee of the property and has to hand the same over to the legal heir of the property, based on the will made by the person deceased.

To know more, please write to us at iwill@icicisecurities.com