Making inheritance simple: How wills, nominees and beneficial owners actually work

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Most people assume their assets would automatically go to the right person. In reality, banks, insurers, and investment platforms follow rigid rules. A nominee is not the heir. A joint account holder is not always the successor. And a will that is vague or outdated can complicate things rather than solve them. When these pieces don't match, families end up facing delays, paperwork, and preventable disagreements.

Begin with the will; it is the last word

A will is the only document that dictates the ultimate owner of your assets. Even a simple handwritten will is legally valid if it is signed, dated and witnessed. The clearer it is, the easier things are for your family. Every major asset — bank accounts, property, FDs, investments, insurance payouts — must be listed with the name of the person who should get it. If your will doesn’t cover something, Indian succession laws take over, which may not align with your wishes. That’s why relying only on nominees or joint holdings rarely works.

Understand what nominee really means

A nominee is the “custodian” who gets the asset first. His/ her purpose is to avoid disruption—to ensure money is not stuck or frozen. But a nominee is not the owner unless your will makes him/ her one. If your will names another person, the will overrides the nominee. This mismatch is the most common source of family disputes: money goes to the nominee immediately, but legally belongs to the heir named in the will. Updating nominees to reflect your will makes life easier for everybody.

Where beneficial ownership comes in

Beneficial ownership is the person who actually funds or benefits from an asset, even if it is held in someone else's name. This is quite common in families when investments are made in the name of one member for convenience or when assets are purchased jointly but managed by one person. Declaring beneficial ownership - even through a simple written note - helps avoid future confusion about who the asset truly belongs to. It also ensures clean tax reporting, as income must be shown by the person who actually benefits.

Make all three layers match each other

Inheritance problems largely arise because the will, nominee details and beneficial ownership don't align. A simple review once every few years keeps everything in sync. Start with the will, update nominees across banks and investments accordingly, and document beneficial ownership wherever two or more people are involved. When all three are aligned, the transition of assets becomes smooth, quick and dispute-free.

FAQs

1. If my nominee and will don't match, who gets the money?

The will prevails. A nominee only receives the money first but has to hand it over to the heir named in the will. In case there is no will, then legal heirs under succession law step in.

2. Do I need a lawyer to write a will?

Not necessarily. A simple will may be handwritten or typed and is legally valid if signed by you and witnessed by two people. A lawyer's assistance is helpful only when you have complicated assets or more than one property.

3. What if there is no will at all?

Your assets will get divided under the Indian succession laws, which are not in line with your wishes. Banks may release funds to nominees first, but ultimate ownership goes to legal heirs, leading to delays and a lot of paperwork.