• Succession certificate/nominee/second holder

IF NO WILL Exists:

This question is only on financial instruments:

1. Nominee of Instruments like mutual funds and fixed deposits and Bank accounts.

Does the nominee become the owner in the absence of a will (inestate case)?

If nominee does not automatically become owner, is a succession certificate (or any other document) required to withdraw money from these instruments in absence of a will?

2. Second holder of financial instruments like mutual funds, fixed deposits, bank accounts.

Is the second holder (either or survivor mode) the final owner if the first holder dies inestate, without a will?

Thank you.
Asked 7 years ago in Family Law
Religion: Hindu

16 answers received from multiple lawyers

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16 Answers

1) nominee is only a trustee for legal heirs

2) bank would insist on furnishing indemnity bond , two guarantors to with draw money or furnish succession certificate from court

3) second holder is not the owner if first holder dies intestate .he is mere trustee

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

1. The nominee is mere trustee of the proeprty and he does not become its owner by operation of law unless he alone it sole legal heir of the person who made him nominee.

2. Second holder does not become sole or full owner of the moveable if the first holder has any other legal heri apart from the second holder .

If you post your actual dispute then further advice can be given.

Devajyoti Barman
Advocate, Kolkata
22920 Answers
498 Consultations

5.0 on 5.0

Dear Concerned,

Does the nominee become the owner in the absence of a will (inestate case)?

YES thats the logic behind assigning a Nominee - the nominee becomes the beneficiary. Yes Succession certificate will be needed.

Is the second holder (either or survivor mode) the final owner if the first holder dies inestate, without a will?

Yes if these financial instruments are taken in Joint names the second owner becomes the beneficiary .

Best of Luck

Atulay Nehra
Advocate, Noida
1309 Answers
58 Consultations

5.0 on 5.0

1. A nominee is entitled to realise liquid assets without obtaining succession certificate. Succession Certificate is required when there is no nomination. However, a nominee is only a trustee of all legal heirs, who is under a duty to divide the assets among the heirs. Nomination does not oust the law of succession.

2. In the event of demise of first holder his share will devolve through succession. The second holder will become the absolute owner only if he/she is the sole surviving legal heir of the first holder.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

RBI circular

6. SETTLEMENT OF CLAIMS IN RESPECT OF DECEASED DEPOSITORS

To facilitate expeditious and hassle-free settlement of claims on the death of a depositor, the following guidelines may be followed:

Access to balance in deposit accounts

6.1 Accounts with survivor/ nominee clause

In the case of deposit accounts where the depositor had utilised the nomination facility and made a valid nomination or where the account was opened with the survivorship clause ("either or survivor", or "anyone or survivor", or "former or survivor" or "latter or survivor"), the payment of the balance in the deposit account to the survivor(s)/nominee of a deceased deposit account holder represents a valid discharge of the bank's liability provided:

(a) the bank has exercised due care and caution in establishing the identity of the survivor(s) / nominee and the fact of death of the account holder, through appropriate documentary evidence;

(b) there is no order from the competent court restraining the bank from making the payment from the account of the deceased; and

(c) it has been made clear to the survivor(s) / nominee that he would be receiving the payment from the bank as a trustee of the legal heirs of the deceased depositor, i.e., such payment to him shall not affect the right or claim which any person may have against the survivor(s) / nominee to whom the payment is made.

6.2 It may be noted that since payment made to the survivor(s) / nominee, subject to the foregoing conditions, would constitute a full discharge of the bank's liability, insistence on production of legal representation is superfluous and unwarranted and only serves to cause entirely avoidable inconvenience to the survivor(s) / nominee and would, therefore, invite serious supervisory disapproval. In such case, therefore, while making payment to the survivor(s) / nominee of the deceased depositor, the banks are advised to desist from insisting on production of succession certificate, letter of administration or probate, etc., or obtain any bond of indemnity or surety from the survivor(s)/nominee, irrespective of the amount standing to the credit of the deceased account holder.

2) as per said circular survior is not the absolute owner but mere trustee

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

Sorry , I can not agree to the information you found online.

If there is joint a/c holder then on death of one holder his half share devolves upon his own legal heirs . In other words on death of one holder of joint a/c the other one does not become its sole owner.

This supposition as made in your subsequent post is wholly without any basis of law at all.

Devajyoti Barman
Advocate, Kolkata
22920 Answers
498 Consultations

5.0 on 5.0

Does the nominee become the owner in the absence of a will

Under such situation, the nominee shall be a trustee to receive the claim amount on behalf of the legal heirs and to disburse the same to them. This is law involved in it.

If nominee does not automatically become owner, is a succession certificate (or any other document) required to withdraw money from these instruments in absence of a will?

Nominee can receive and disburse the claim amount equally to the legal heirs.

Is the second holder (either or survivor mode) the final owner if the first holder dies inestate, without a will?

In the either or survivor arrangement, the survivor becomes the absolute owner of all the account opened under this arrangement or type of account.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

So what is the legal status of second holder (sole beneficiary / not sole beneficiary) in case first holder passes away without a will?

Under E or S the survivor becomes the absolute owner or holder of the account and he can exercise full rights absolutely.

This article seems to suggest that second owner (if in either or survivor mode) is the full owner perhaps?

It says the "survivor" can also get the balance transferred to his/her name (if required).

The amount remains in the same account, the survivor becomes the owner of the entire amount individually upon the demise of the joint account holder under E or S type of account

The will is a different subject to that of the joint account.

The joint account unless it is cancelled by the joint holders, shall be effective and the will cannot over rule the provisions of E or S type of account.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

1) second holder is not the indisputable owner of money on demise of first holder

2) he is mere trustee for the legal heirs of the first holder

3) I have already reproduced RBI circular on this regard

4) similar is the position in respect of your second query

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

1) if account is in joint names on death of principal holder the second holder takes money as trustee only

2) read RBI circular cited by me for better clarity on the legal position

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

1. Legal status of second holder in 'Either or Survivor' mode of bank account. Is second holder full and final and indisputable owner of money after demise of first holder?

The purpose of this option itself is to confirm that the survivor shall automatically acquire the status as a single holder to operate and enjoy the benefits of this account. Thus the survivor shall become the owner which is within the provisions of law governing this position.

2. Legal status of second holder in 'Former or Survivor' mode of bank account. Is second holder full and final and indisputable owner of money after demise of first holder?

The answer to the question repeated in a different form is the same as given above.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

See Clause B in this form of Allahbad bank.

It does not even ask for ID papers to delete the name of the deceased holder.

It is not clear though whether this is about deceased first holder or deceased second holder.

Your query appears to be that you are confused with the provisions as mentioned in the clause B referred by you.

The clause clearly mentions about the documents required, for your information the clause is repeated below:

"""I/We submit photocopy of the following document(s) together with originals. Please return the original to us after verification.

Death Certificate issued by"""

From the above it can be seen that you are required to submit certain documents including the death certificate of the deceased holder.

What else do you want to clarify when the position of law is very clear?

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

on death of first holder second holder receives payment only as trustee for benefit of legal heirs

the second holder is not the absolute owner of money lying in said account

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

This is again the interpretation of law.

The RBI circular is not law.

The RBI circular referred herein above is in the situation of a nominee claiming the death claim amount of the deceased depositor.

Your query is about the account which is operated under E or S basis. Here there is no question of individual nominee.

Nomination can be made to such type of accounts too but that nominee will be for both for the circumstances arising when both the account holders meet their unfortunate death together or simultaneously for eg. due to accident etc.

In fact such nominee also cannot take away the money by himself/herself, the nominee after receiving this claim amount has to disburse the same to the legal heirs of both the deceased.

Therefore please be convinced about the provisions of law in respect of a bank account being operated on the E or S basis and the purpose of the same. .

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

Mandate given to bank does not over ride succession law applicable to parties

2) In the present case since mother is Hindu on her demise intestate provisions of Hindu succession act would be applicable

3) both movable and immovable property would devolve on her class 1 legal heirs

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

Nominee and the second holder cannot be the same person. There is no provision for that.

In a jointly held account, both the account holders shall nominate a single person for the event as mentioned in my previous post, in the E or S type of account.

If there is a dispute then the relevant act or law shall emerge by which you will come to know what is to be done next as per the provisions of the law referred therein.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

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