Why adding a nominee to your demat account is not enough

Initially, a nominee is a person appointed by the demat account holder to receive the securities in the event of his/her death. This arrangement may seem like an easy way to ensure that your assets reach the intended recipient; However, this is not the case. Nominees are not the legal heirs of your property; They only act as a custodian to facilitate the transfer of funds.

Why do you need a will?

A will is a legal document that allows you to decide how your assets will be distributed among your beneficiaries after your death. This ensures that your money is transferred to the intended recipients, thus avoiding any disputes among family members. In the absence of a Will, assets are distributed according to applicable succession laws, which may not be in line with your wishes.

For example, let’s say Kumar has named his elder son as a nominee in his demat account. In the event of Kumar’s demise, the securities would be transferred to his son, who would act as a guardian. However, if Kumar’s will mentions that the shares are to be distributed equally among his three children, then the nominee is legally bound to distribute the property accordingly. Thus, Will replaces nomination in a demat account, emphasizing the importance of a well-crafted Will.

consequences of not having a will

In the absence of a will, the distribution of assets may be determined by intestacy laws, which often do not align with the wishes of the deceased. This can result in protracted legal battles, strained family relationships and potentially substantial financial losses – reducing the value of the property.

India’s currently unclaimed assets as we head into the next decade 1.20 trillion, is set to grow exponentially due to rapid adoption of fin-tech, which has the potential to make paper trails obsolete. The typical process of accessing inheritance in India takes about a year and costs minimally. 1.5 lakh, we must acknowledge the need to find effective solutions that connect families in harmony with their rightful heritage, technology and tradition.

How does one go about drafting a Will?

Drafting a will begins with taking an inventory of your assets, including property, investments, and all other valuable assets. Next, decide on your beneficiaries and specify the distribution of assets among them. Appoint a trusted executor to carry out your wishes and manage the estate. If applicable, consider naming a guardian for minor children. Consult a legal professional or use a reputable online will forum to ensure that your testament complies with local laws and regulations.

Traditionally, drafting a will involved consulting a lawyer or professional will writer, which often proved time-consuming, expensive, and inaccessible to many. Usually, it can cost up to 2 lakhs to write a legally valid Will through a lawyer in India and an average of 1 month to prepare the Will. However, with technological advancement, online platforms have emerged, simplifying the process and offering better options. These online platforms guide users through creating a legally valid Will with customizable templates to suit individual needs and can deliver a draft in a few hours and with minimal cost. 500 for the drafting of the Will.

protect your financial legacy

In order to secure your financial legacy and ensure that your assets are distributed as per your wishes, it is strongly recommended that you do not rely solely on the nomination process in your Demat account. It is essential to have a well-drafted will. The advent of online will platforms has made this process more accessible than ever. By taking advantage of these resources and understanding the limitations of demat enrollment, you can protect your money and provide peace of mind to your loved ones.

Vishnu Chundi is the founder and CEO of Asanvil.