Have You Nominated the Right Person?
Published by Sharekhan Education | April 6, 2020
Have You Nominated the Right Person?
David named his secretary Tina as his nominee for all his bank deposits. I am penny less today, will I get that money or not is what his wife is thinking.
What is nomination? How does it work? Whom should I nominate? I am sure such and many more questions cross your mind after reading about David. David is not alone there are many like him who has committed such blunders, either in good faith or knowingly.
To avoid such blunders it is important to understand the power of nomination.
- So what is nomination? Nomination is one of the important estate planning tools. It is a statement of who should get your money after your demise. It is a way to save hectic paperwork for your legal heirs. Though not compulsory for all, certain investments like insurance have made it mandatory.
- What will happen if you do not nominate? Legal heirs will have to go through a tedious process of paperwork to prove succession. A death certificate, proof of relation, succession certificate etc. will have to be produced.
- Whom should you nominate? As it is important to nominate you should choose your nominee wisely ideally a close relative like your spouse, children or parents.
- How does nominating the right person help? As nomination is important it does not mean that you nominate anyone randomly. Choosing the right nominee will ensure that your money reaches the right hands. Coming back to David’s example had he nominated wisely, his wife would have been spared the stress that she would go through.
Remember that the nominee is not the absolute owner but only a trustee of your money. He is entitled to collect the money and hand it over to the beneficiaries/ legal heirs.
So have you nominated the right person? If not, then do the needful.
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