Why adding a nominee to your Demat account is just not enough | Mint

As India’s investor community grows, more individuals are turning to stock market investments to grow their wealth. While many investors rely on the nomination process in their demat accounts to ensure a seamless transfer of wealth to their loved ones, it’s crucial to understand the limitations of this process. An over-reliance on this nomination process is a risky gamble that may leave your financial legacy in jeopardy.

To begin with, a nominee is a person appointed by the demat account holder to receive the securities in the event of the latter’s death. This arrangement may seem like a foolproof way to ensure that your assets reach the intended recipient; however, this is not the case. Nominees are not the legal heirs to your assets; they merely act as a custodian to facilitate the transfer of wealth.