Do you really need a will if all your assets already have nominations?

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Many Indians believe that if they’ve already nominated someone for their bank accounts, mutual funds, insurance policies, or even demat accounts, they don’t need a will. After all, the nominee will just collect the money, right? This assumption is partly true, but it doesn’t tell the full story.

Nominations make transfer of assets quicker, but they don’t always decide who ultimately owns those assets. That’s where a will still matters.

What nominations actually do

A nomination is like appointing a caretaker. It tells the bank, insurer, or mutual fund who should receive the money when the account holder passes away. The institution pays out to the nominee, but legally, that nominee holds the money in trust for the legal heirs. For example, if you nominate your brother in a bank account, he can collect the funds easily, but the rightful heirs under succession law — your spouse, children, or parents — may still have a claim. The nominee doesn’t automatically become the owner unless the will or inheritance law says so.

Where the law stands

Courts in India have repeatedly clarified this difference. In the case of insurance, the Supreme Court has ruled that nominees are only custodians and the ultimate ownership goes to legal heirs. For shares and securities, the Companies Act recognizes nominees more strongly, but even then, disputes can arise if heirs contest. Without a will, succession laws under the Hindu Succession Act, Indian Succession Act, or personal laws decide who gets what — and that can get messy.

Why a will adds clarity

A will is the document that spells out your actual intentions. It says who should inherit your assets and in what proportion. If you’ve nominated your daughter in a bank account but want her to keep that money entirely, you can make that clear in your will. Otherwise, your other heirs may challenge her right. A will reduces disputes, ensures your wishes are respected, and makes estate distribution legally stronger.

When nominations are helpful

This doesn’t mean nominations are useless. They’re very helpful for quick access. Your family doesn’t have to wait for legal paperwork or succession certificates to get at least some funds released. For day-to-day liquidity during tough times, nominations are vital. But they should work in harmony with your will, not replace it.

What you should do

The best approach is to align your nominations with your will. Make sure the person you nominate is also the one you’ve named as beneficiary in your will for that asset. This way, there’s no confusion or conflict. If you’ve made changes in your family situation — marriage, divorce, new children, or even fallouts — review both your will and nominations regularly to keep them consistent.

FAQs

1. If I have no will, does the nominee automatically inherit everything?

No. The nominee only gets custody of the asset. The ultimate distribution is decided by succession laws or court orders, unless you leave behind a will.

2. Can I have different nominees and beneficiaries for the same asset?

Yes, you can, but it often leads to disputes. For example, nominating a sibling but willing the money to your spouse can cause conflict. It’s best to keep them aligned.

3. Do I need to register my will for it to be valid?

No, registration isn’t compulsory. A simple handwritten or typed will signed in the presence of two witnesses is legally valid. Registration only adds an extra layer of security.