What happens to your demat and trading accounts if you don’t make a will?

Every demat account holder can add a nominee, and this person can get access to the shares directly after the account holder’s death.

Most people open demat and trading accounts with little thought about what happens to them later. We plan for property and bank accounts, but stock market investments are often ignored in estate planning. If you don’t leave a will, your shares and securities don’t vanish—but your heirs may have to jump through extra hoops to claim them.

Nomination makes it easier

Every demat account holder can add a nominee, and this person can get access to the shares directly after the account holder’s death. The nominee is meant to act as a custodian, passing assets to the rightful heirs. If you’ve nominated a family member and your will says the same, the transfer is smooth. Without a will, however, the nominee’s right can be challenged by legal heirs, and that’s when disputes or delays can arise.

When there is no nominee

If you never added a nominee to your demat or trading account, your family will need to produce a succession certificate or legal heir certificate. This means going to court, which adds time, cost, and stress. Even if you’re only holding a few shares, the process is the same. This is why SEBI and depositories keep reminding investors to fill in nominee details.

What if there’s no will?

If you die without a will, your demat account falls under the Hindu Succession Act (for Hindus, Sikhs, Buddhists, and Jains) or relevant personal laws for other communities. Shares will be divided among your legal heirs as per the succession laws. For example, a spouse and children will inherit equally. The catch is: without a will, proving who gets what may take time and paperwork, and the nominee may only act as a temporary holder.

Why a will still matters

Even if you’ve added a nominee, making a will is the cleanest way to ensure there are no fights or delays. A will clearly states who gets your shares and in what proportion. This avoids confusion between nominee rights and legal heir rights. In today’s world, where many of us hold multiple demat accounts and SIPs, a will is just as important as the investments themselves.

Also read | Trusts vs wills: How India's wealthy are preparing for generational shift?

FAQs

Q1. Does a nominee automatically become the owner of my shares?
Not always. A nominee can claim the shares, but they may only hold them as a trustee for the legal heirs. If your will specifies something different, the will prevails.

Q2. What happens if I don’t add a nominee?
Your heirs will have to go to court for a succession certificate or legal heir certificate to claim your securities, which can take months.

Q3. Can my spouse or children fight with the nominee?
Yes, legal heirs can contest the nominee’s claim if there’s no will. That’s why aligning your will and nominee details is the safest approach.