CS Final Student Trainee
727 Points
Joined April 2012
The nomination option for various bank accounts, insurance policies, shares held by you is a convenient method for the bank/ insurer/ company to determine what to do with the balance in your account, the proceeds of your insurance policy and your shares upon your death.
It will simply transfer them to your nominee without asking for a succession certificate or verifying claims of legal heirs. Your nominee holds these amounts in trust for the beneficiaries in your Will.
To put it simply, if your Will provides that the money in your bank account you should go to your wife, and the nomination has your son’s name, the shares will be transferred to your son upon your death. However, your son would hold these shares for your wife – who can get them transferred to her own name based on your Will. Your son has no right to sell or transfer or gift these shares to anyone else. Therefore, generally speaking, a Will prevails over a nomination.
Note: A Will is not a substitute for nomination and neither is a nomination a substitute for making a Will.