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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Tools for Estate Planning

Caselet: Mrs. Iyer, a widow, holds a bank deposit of Rs 10 lakh and a house. She has two children, A and B. She wants to ensure that the deposit goes only to A without going through succession proceedings, and that it is not part of the will's residuary clause. Which option is most appropriate and why?

The best route is making A a joint holder on a former-or-survivor basis and recording the intent in the will. A nominee typically only receives the money as a custodian for the legal heirs under succession law, so nomination alone does not ensure A becomes the owner.

  1. ARegister A as nominee on the deposit, since a nominee alone becomes the absolute owner of the money
  2. BMake A a joint holder on a 'former or survivor' basis and also state the intent in the will, noting a nominee generally receives only as a trustee for legal heirsCorrect
  3. CLeave the deposit silent in the will since banks pay by law of intestacy
  4. DTransfer the deposit to B to avoid disputes

Explanation

A nominee generally collects the money but may hold it for legal heirs under succession law, so nomination alone may not guarantee ownership. Joint holding with survivorship passes the claim to the survivor in operation of the account terms, and a clear will supports intent. Giving it to B defeats the aim.

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