What to do if the account holder dies and the name of the nominee is not added in the bnk?

Bank Account / What to do if the account holder dies and the name of the nominee is not added in the bnk?

Bank Account - What to do if the account holder dies and the name of the nominee is not added in the bnk?

Bank Account: Creating a nominee for a bank account, demat account and other financial accounts is an essential process that is often overlooked. When you go to open a new account in your bank, the bank staff asks you to nominate a nominee. It involves entering the details like the nominee's name, relation, age, and address. But the question arises as to why it is so important to create a nominee and what happens if a nominee is not created?

Importance of Nominee

While selecting a nominee, you are nominating the people who will inherit the money deposited in your account if you pass away. This process in a way helps in managing your wealth and prevents your family members from getting into a financial crisis.

When an account holder dies, all the money deposited in his account is given to the nominee nominated by him. If there are more than one nominee, the money is divided equally among them. Moreover, under the facility of many banks, you can also specify how much amount will go to each nominee.

Nominee Example

Suppose, Arvind has made his wife, mother, and sister as nominees for his bank account. If Arvind dies, the money deposited in his account will be divided equally among his wife, mother, and sister. On the other hand, Karan has also made three nominees but he has specified that after his death, his wife will get 50 percent, and his mother and sister will get 25-25 percent of the money. If Karan dies, his wife will get 50 percent of the amount, while mother and sister will get 25-25 percent.

What happens if there is no nominee?

If a person has not made a nominee for his account, then all the money deposited in his account will be given to his legal heirs after his death. The legal heirs of a married person are his wife, children, and parents. For an unmarried person, the legal heirs can be his parents, siblings.

In case of no nominee, the process of money distribution involves a lot of paperwork, which demands time and effort.

How to get money in case of no nominee?

If there was no nominee at the time of the account holder's death, the legal heir will have to visit the bank branch with some essential documents to receive the money deposited in his account. The required documents include the death certificate of the deceased account holder, photographs of the legal heir, KYC (Know Your Customer) documents, Letter of Disclaimer Annexure-A, and Letter of Indemnity Annexure-C.

Conclusion

Creating a nominee not only helps in organizing your financial affairs but also provides financial security to your family and loved ones after your demise. It is a simple but important step that can prevent many potential problems in the future. Hence, it is advised that you nominate a nominee for all your financial accounts and keep his/her details updated regularly.