Shares ~ Nominee Vs. Will: And The Winner Is……?

INTRODUCTION

Problems of inheritance and succession are inevitable especially in a country like India where many businesses are still family owned or controlled. Many times bitter succession battles have destroyed otherwise well established businesses.

A Will is the last wish of a deceased individual and it determines how his estate and assets are to be distributed. However, in several cases, the deceased has not only made a Will, but he has also made a nomination in respect of several of his assets.

Nomination is something which is extremely popular nowadays and is increasingly being used in co-operative housing societies, depository / demat accounts, mutual funds, Government bonds / securities, shares, bank accounts, etc. Nomination is something which is advisable in all cases even when the asset is held in joint names. Simply put, a nomination means that the owner of the asset has designated another person in his place after his death. SEBI has made it mandatory for all investors to compulsorily opt for nomination in demat accounts or expressly opt out of the same. The deadline for the same was 31st December, 2023, and those for holders who did not nominate or opt out of nomination by 31st December, 2023, their demat account were frozen.

A question which often arises is which is