Nominee Update - Why it’s Critical? How it helps your family in bad times?
When someone is opening a bank account, getting a new insurance policy or doing anything that involves money or property, it is mandatory to fill out a small column asking who would be the nominee?
Many people wonder what a Nominee is and why it is crucial because many legal form filling processes are withheld if they do not fill the nominee's name. Why though? Why it is that crucial?
Let us first understand what a nomination is and who is a Nominee!
Nomination is when the person investing or safeguarding money decides who will get that money after their sudden demise. So, he is called a nominator. And the nominee is a person whose name, cash or assets are to be transferred after the nominator’s death.
Now, why is this all-important and why are we writing about this?
In simple words, nomination helps ease the transfer of cash or assets to loved ones in case of sudden death. It saves them the unwanted hustle like getting succession certificates and affidavits, which involves high costs and a period of 3 months to 1 year. The legal processes are followed to the letter where the money is involved.
In every Indian family, the husband and wife work for a better life for their family, elder brother or sister looks after the younger ones. Everybody is taking care of each other so they can limit their suffering. They save, invest, get policies, and forget or give minor importance to the nomination. What is the result, then? After the investor's demise, their family suffers to get what should be rightfully theirs. According to RBI reports, there are thousands of crores worth of money sitting in the bank because the deceased has not filled in the nomination details, and their families are still struggling to claim that money.
Even if you fill the nomination initially, it's your duty to timely revisit the nominees of all your investments, maybe once in 3 months or six months. Why? Because there can be a possibility that the nominee himself has died, hence in that case, the nomination becomes invalid and as equal to no nomination. The other possibility is a change in nomination required due to personal reasons.
Moreover, wrong nominee details such as name mismatch with Aadhaar due to spelling mistakes or name changes of wife after marriage also make the nomination invalid. All the above cases invite the unnecessary struggle when claims to your loved ones.
All above cases invites the unnecessary struggle at the time of claims to your loved ones.
Filling and updating the nomination column should not be taken lightly. It is a crucial process if you want your loved one to live a peaceful life even after you die to whom you dedicated your life. So go and check every investment or bank account or insurance policy or deed of the property. Ensure that you have filled up or updated the nomination details correctly so that your loved ones won’t suffer.