A nominee is not an heir — and why that matters in India

Almost every Indian household believes the same thing about nomination, and it is wrong in a way that only becomes apparent at the worst possible time. Naming your spouse as nominee on a mutual fund does not make them the owner of it. It makes them the person the fund house is allowed to hand the money to. Those are different things, and the distance between them is where families end up in court.

What a nominee actually is

A nominee is a trustee, not an heir. The institution — bank, fund house, depository, insurer — needs one person it can discharge its liability to without waiting for a succession certificate. Nomination gives it that person. Indian courts, up to the Supreme Court, have said repeatedly that the nominee then holds the money on behalf of whoever the law or a will says should inherit it.

So a nominee makes the transfer fast. A will decides who eventually keeps it. If the two disagree, the will wins — and if there is no will, the applicable succession law wins, which may well name people the deceased never intended.

The one exception: life insurance

Since the 2015 amendment to the Insurance Act, where a life-insurance nominee is a parent, spouse or child, that person is a beneficial nominee — the proceeds are theirs, not held for the estate. This is the single place in Indian personal finance where nomination genuinely decides ownership, and it is a strong reason to check the nominee on your term policy specifically, rather than assuming the one you named at twenty-five is still the one you want.

You need both, and they should agree

The right arrangement is unglamorous: nominate on every holding so the transfer is quick, write a will so the ownership is settled, and make sure the two say the same thing. Most family disputes after a death are not caused by greed. They are caused by a nomination made in 2011 and a life that changed in 2019.

• Marriage, divorce, a child, a death in the family — each is a reason to re-check every nomination you hold.
• Joint accounts are not a substitute. Survivorship gives the other holder operational access, not necessarily ownership.
• A will does not need a lawyer or stamp paper. It needs to be in writing, signed, and witnessed by two people who receive nothing under it. Registration is optional and useful.

What the Wallet does about it

Every holding in your Wallet carries a nominee field, and the Wallet raises a standing reminder for any holding that has none — it is the one reminder with no date attached, because it is not about a deadline. It sits there until it is answered.

Each holding also carries the things a family actually needs at that moment and never has: the policy or folio number, and the name, phone and email of the agent or the person to call. A nominee who knows they are a nominee but does not know which insurer, which policy number or who to ring is only marginally better off than one who knows nothing.

The six-row vault

Alongside the holdings, the Wallet keeps a short checklist of the documents a family looks for first:

• PAN card — needed for every investment claim.
• Aadhaar — a masked copy only.
• Term policy document — the PDF, not just the number.
• Health policy and e-card — the one to show at a hospital.
• Property papers — patta, sale deed, a scan.
• Will — the row most families leave empty.

Being plain about the limits: this is a place to keep the papers and the names, not a legal instrument. Mr. Fino does not hold a copy of your will in escrow, does not notify anyone on your behalf, and has no trusted-contact or inactivity mechanism. What it does is make sure the information exists in one place and that the gaps are visible while you are still around to close them.

An hour, once

1. 1
   List what you own

   Bank accounts, deposits, mutual funds, demat, EPF, NPS, every insurance policy, property, the locker. The Wallet exists for exactly this and does not cap how much you add.
2. 2
   Check the nominee on each

   Not whether there is one — who it is. Most can be changed online in minutes and none of them charge for it.
3. 3
   Write the will

   One page is enough to start: what you own, who gets it, signed, two witnesses who inherit nothing. A better one later is easier than a first one never.
4. 4
   Tell one person where all of it is

   The best-organised records in the world are useless if nobody knows they exist.

Why a money app is talking about this

Because it is the highest-value hour in personal finance and it appears on no score, including ours. It does not raise your number, it does not clear a rung, and it changes nothing about your cash flow. It only matters once, and by then you are not the one dealing with it. The rest of what we measure is in how the score is calculated; this one is simply worth doing anyway.