When investors open bank fixed deposits, invest in mutual funds, or contribute to small savings schemes like the Public Provident Fund (PPF), they are typically asked to nominate a person who can receive the funds in case of death. According to reports from Mint, many investors assume that nominating someone automatically makes them the legal owner of the money after death. However, a nominee only acts as a custodian of the assets until they are transferred to the rightful legal heirs, such as the deceased investor's spouse, children, or parents. The purpose of having a nominee is to facilitate smooth settlement and transfer of assets after the account holder's death. You can designate a trusted and eligible person as a nominee for your assets, such as your spouse, sibling, or other family member or relative. It is also important to review and update nominations after major life events, such as marriage, divorce, the death of a nominee, or the birth or adoption of a child, to ensure that your nominations reflect your wishes.
The final ownership of money in bank accounts, mutual funds, or other assets is determined by a valid will, succession laws, and the rights of legal heirs, not merely by the nominee mentioned in the account. As reported by Mint, if the deceased person has left a legally valid will, the assets are distributed according to that will. In the absence of a will, the applicable inheritance or succession laws decide who has the rightful claim over the money and property. Earlier, obtaining probate of a will was mandatory for inheritance involving assets in certain cities across India, but following a legal change in 2025, probate is no longer mandatory in these cases. It can still be obtained voluntarily, particularly when family disputes are anticipated, multiple executors or beneficiaries are involved, or the estate includes institutional, banking or cross-border assets.
According to Mint reports, in the case of PPF accounts, the account shall be closed after the investor's death and the nominee or legal heir can claim the balance available in the account after submitting prescribed documents to the bank or post office. Once the claim process is completed, the entire eligible balance is paid to the nominee or legal heir, and the account is closed permanently. For bank fixed deposits, if a nominee or legal heir wants to claim the proceeds after the account holder's death, they must submit a claim to the specified bank along with the death certificate and other required documents. The process is pretty similar to that of mutual funds, where the nominee or legal heir must submit a transmission request to the asset management company or its registrar, which typically processes it based on a standard set of documents.
As reported by Mint, for mutual funds, a legal heir or nominee must submit a transmission request to the asset management company or its registrar, which typically processes it based on a standard set of documents. The process is similar to that of bank fixed deposits, requiring submission of death certificate and other required documents to the specified bank. If a nominee or legal heir wants to claim the proceeds of a bank fixed deposit after the account holder's death, the process is pretty similar to that of mutual funds, where they must submit a claim to the specified bank along with the death certificate and other required documents.
According to Mint reports, a comprehensive estate plan usually includes several legal documents that clearly state a person's wishes and explain how their assets should be distributed among family members in case of death. Key documents may include a will, trusts, and beneficiary designations to ensure assets such as life insurance and retirement investments are directly transferred to named beneficiaries without going through probate. A well-prepared estate plan ensures the original owner's wishes are honoured, minimises disputes among legal heirs, and provides clarity during emotionally difficult times. It is important to note that such a comprehensive estate plan should be regularly reviewed and updated after major life events to ensure that nominations and beneficiary designations reflect current wishes and circumstances.
