Navigating the legal landscape of property inheritance can be complex, particularly in a diverse country like India. Two pivotal roles often create confusion - the Nominee and the Legal Heir. This article aims to clarify the differences and shed light on who, between a nominee and a legal heir, ultimately inherits the assets.
Nominee vs Legal Heir: The Basics
First, let's define the two roles:
- Nominee: A nominee is a trustee or custodian appointed by the asset owner. The nominee holds the assets in case of the owner's demise until the legal heir can claim them.
- Legal Heir: A legal heir is an individual who is entitled to inherit the assets of the deceased as per the law or the will of the deceased.
The Legal Perspective: Who Inherits the Assets?
In India, as per law, it is the legal heir who is the ultimate beneficiary and inherits the assets of the deceased.
- Bank Deposits and Financial Instruments: In the case of bank deposits and financial instruments like mutual funds, shares, etc., the nominee acts as a custodian. The nominee should ideally transfer these assets to the legal heir.
- Real Estate: In the case of immovable property, there can be no nominee. The property automatically passes on to the legal heir.
Legal Rulings Reinforcing the Rights of Legal Heirs
The Supreme Court of India has consistently upheld the rights of legal heirs over nominees. Here are some key rulings:
- In the case of Sarbati Devi vs Smt. Usha Devi, the court held that a nominee is merely a custodian and not the owner of the assets. The legal heir, according to the Succession Act, is the actual owner.
- In the case of Harsha Nitin Kokate vs The Saraswat Co-operative Bank Ltd. and Others, the court ruled that even if a nominee is appointed, the shares of a company should be transferred to the legal heirs.
Mitigating Conflicts: The Role of a Will
To avoid potential conflicts between nominees and legal heirs, asset owners are advised to:
- Create a Will: A clear and unambiguous Will can prevent any confusion regarding asset distribution after the owner's demise. The Will should explicitly state the distribution of assets amongst the legal heirs.
- Match Nominee and Legal Heir: If possible, the nominee should be one of the legal heirs. This could reduce possible disputes and ensure a smooth transfer of assets.
- Communicate Clearly: The asset owner should inform all concerned parties about the specifics of the Will and their intentions regarding the distribution of assets.
While the nominee is a caretaker of assets, it is the legal heir who ultimately inherits the assets in India. To ensure your assets are distributed as per your wishes after your demise, consider crafting a clear Will, and seek legal advice if necessary.
Still confused about the differences between a nominee and a legal heir, or unsure about how to draft a Will? Reach out to our team of legal experts at +91 80692 32888, drop a WhatsApp message on +91 87644 47848, or write to us at email@example.com. Let us assist you in your journey of creating a Will, understanding notarisation, and registration.