Appointing a nominee for your investments
Many of us invest in shares, deposits and mutual funds without bothering to fill up the nomination details. Since choosing a nominee is not mandatory while making an investment, the decision is often postponed. However, this process simplifies for nominees the realisation of investment proceeds in case of the original investor’s demise. This is even more critical when an investment is held in one person’s name since death makes it difficult to access his funds till several formalities are completed.
If nominees have been appointed, they can produce basic documents, such as a death certificate,to access the funds. The absence of a nominee may require more documentation,such as the probate of will and certified list of legal heirs, before the investment can be transmitted or withdrawn. Nominees are deemed to hold the investment proceeds in a trust if it is disputed by legal heirs, pending a decision by thecourts.
Documentation: Most investment forms provide a space for selecting a nominee. If it is not filled up at the time of investing, other prescribed forms can be used later.
Multiplenominees: Most investments allow more than one nominee and the percentage of share that each would be entitled to.
Signature: The nomination form has to be filled up by all joint holders, irrespective of the mode of operation of the investment.
Transmission: Nominees can have investments transferred in their names for redemption later. For this, they need to complete the KYC and PAN formalities.
Points to note
Who cannot nominate : Kartas of HUFs and powerof attorney holders are not authorised to make or change nominations or be appointed as nominees to an investment.
NRIs: Non-resident Indians can be named as nominees of investments made in rupees.However, the proceeds cannot be repatriated and have to be continued to be held in rupees.
Who can be the nominees: Certain investments permit the nomination of a trust, religious or educational institutions. Others only permit individuals to be nominated.
Thecontent on this page is courtesy Centre for Investment Education and Learning(CIEL)
http://economictimes.indiatimes.com/articleshow/7487182.cms
