Role of a nominee in case of death

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This query is : Resolved

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This discussion explores the role of a nominee in a demat account when the account holder passes away, particularly when a Will is involved. The nominee received shares after the shareholder's death, even though a Will designates an executor and beneficiaries. The core questions revolve around whether the nominee can retain these shares, if beneficiaries can object, and if the nominee can appoint their own nominee. The consensus suggests the nominee can hold the shares until probate is granted, and can potentially nominate beneficiaries according to their share in the Will.

Nitesh Worah

Nitesh Worah (Querist)
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24 July 2020 The deceased had appointed a nominee in her demat account with the depository participant during her lifetime. The deceased has left behind a WILL in which there IS AN Executor (third party) and 11 beneficiaries the nominee being one of them. As per the WILL the assets of the deceased shall be disposed off by the Executor subsequent to grant of probate and the sale proceeds of these assets be distributed amongst the legatees in the required proportion.

Now After the death of the shareholder , the nominee gets the shares transferred in his personal name and is currently receiving all dividends, bonuses etc. in his account. The nominee has also appointed a nominee in his new demat account .,i.e., his wife. The probate is still pending in the court. All the legatees have consented to the grant of probate in terms of the WILL and there is no objection filed by any third party also.
My querry is :
1. Can the nominee keep these transmitted shares in his account knowing clearly that the same needs to be distributed to the legatees as per WILL by the Executor.
2. Can any legatee successfully object in the probate court on the actions by the nominee holding these shares in his account knowing fully well that these shares belong to the other legatees too.
3. Since nominee is simply a custodian of the shares , can he appoint a member of his family as a nominee in his demat account?

Nitesh Worah

Nitesh Worah (Querist)
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02 August 2020 Kindly help me provide with a suitable legal reply to my query. The nominee is also one of the beneficiaries in the WILL of the Testatrix the probate of which is pending. I want to seek legal help in ensuring that the shares transmitted in the nominee demat account either gets transferred in the Executors demat account or the nominee transfers all the sale proceeds of these shares into the Bank account of the legatees after getting an affidavit from each of the legatees stating that they agree to indemnify the nominee of all legal consequences in case he remits the sale proceeds of these shares into their bank account in proportion to the declaration in the WILL

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 September 2021 1. He can keep it in his demat acc till the probate order from court.
2. No. He being nominee has right to keep it till court's order.
3. He is allowed to nominate all the beneficiaries as per their shares.

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