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.