Whether you are opening a bank account or going for a financial investment, as you fill out the form for it, there is always a column to nominate someone.
Often this column is left by people when opening a bank account, applying for a locker or making investments.
However, it is not recommended to do this. Read on to know why it is important to have a nominee when opening a bank account.
Who can be nominated?
A nominee is a person who can be named while filling out a bank account opening form or applying for an investment vehicle.
A nominee can be anyone close to or trusted by you, such as your parents, spouse, or siblings, who can receive the proceedings on your behalf after your death.
Some investments also allow you to list multiple nominees to whom you can even allocate percentages of the money in your account. If you don’t state the percentage, it will be split equally.
Why is it important to have a candidate?
In the event of an unexpected death, the money in a bank account can be claimed by the legal heir of the deceased. While it may look simple otherwise, it is a lengthy process as many documents such as death and probate certificates and in some cases even a court order are required.
It becomes all the more complicated if the deceased has not nominated anyone as his or her nominee for claiming the money in the bank account(s).
However, if a nominee is in a bank account, the process is much faster as the bank can release the money to the nominee with much less paperwork.
Bank vaults can also have nominees
It is important to know that not only accounts or deposits can be held by the bank if someone dies unexpectedly, but also bank safes. In case of sudden death, everything in the locker will be held by the bank until the required documents are produced if the locker has no proxy.
Women in India normally use safe deposit boxes to store their jewelry and gold, which is useful in times of crisis.
That’s why it’s important to have a nominee for your bank vault if you live in a joint family or are newly married. If there is a nominee, the bank releases all assets to that person present in the locker, with easier paperwork.