Difference between authorities given to Nominee & Legal Heir.
Nominee vs Legal Heir
The past few years have been uncertain for the whole world. Everyone wants to make their loved one’s future safe because we never know what will happen next. You might have heard terms like Legal Heir and Nominee. People get confused between both of these terms, let us figure out what exactly is the difference in this article.
Legal Heir
According to the law, the heir is the one who is appointed by the law, who is succeeded to the ancestor’s estate whose sudden death occurred and he/she had not formed a will. The term legal heir is used to refer to a person who succeeds the property by will or law (from his/her ancestors).
Nominee
A person who receives the benefits after the death of an individual. individuals can nominate one or more individuals for his/her assets. The nominee is required to act best in the interest of the claimant. The nominee is the one who is there to facilitate the transaction in case of the sudden death of an individual.
If Will is not created, nomination holds lower power than succession
Let us understand this equation with the help of an example. If an old man dies without forming a will. An old man has two sons A, B, and one daughter C. If son A is the nominee for the property which the old man owned. According to law, inherited property will not be transferred to son A based on nomination. Son B and Daughter C can claim their rights for the ownership of the property of his/her father, as they are considered to be the legal heirs of the properties owned by their father. Nomination can’t override the laws of succession.
What is the role of a Nominee for movable assets?
As we discussed above, a nominee can’t get the whole rights of property, so what is the role of the nominee? Let us see that. The nominee is the one who has to take care of the property till the property doesn’t get transferred rightfully to the legal heir. The nominee has to manage the property till the ownership is transferred. The role of the nominee ends as the ownership is transferred to the legal heirs, a nominee is the caretaker of the property for the time being and is also considered as a trustee of the legal heir.
What is the role of the Nominee for immovable assets?
Immovable assets include Fixed deposits, Mutual funds, Listed Shares, Employee Provident Fund (EPF), Public Provident Fund (PPF), and Insurance Policies.
For example, in all these assets the old man has appointed son A as a nominee then on death all these assets are transferred to Son A as a trustee of the legal heir. But all the legal heirs, son B, and daughter C can claim their respective shares for the assets. All this is only applicable if the will is not prepared by the old man or the share of ownership is not mentioned in the will for a particular asset.
What happens if will is created?
If the old man (testator) has mentioned that property should be in the name of son A (beneficiary) in the will. Also, Son A is the nominee of the property. Then son B and daughter C can’t ask for their rightful shares legally. This is true for both movable as well as immovable assets. They can challenge the will in court on various grounds, but they need proof for that.
Will is the legal document, which is considered over the nominee. Both the Registered and Unregistered will are considered in the courtroom or in front of the law.
Summary | Nominee vs Legal Heir
Legal Heir is considered to be the successor of the property or an asset if the will is not created by an individual, the nominee doesn’t have any rights related to ownership of the property for immovable assets. Even for movable assets, legal heirs can claim their rights if the will is not created or if the distribution of an asset is not mentioned in the will. If the will is created and the shares for the particular property are mentioned then those people will be considered as the rightful owner of the property.