I am 45 years married with a daughter and reside in Raichur. I have invested INR 2 Lakhs in an equity mutual fund scheme. I also have invested INR 1.5 Lakhs in stocks. I have assigned my brother as the nominee for my mutual funds and stocks. I have made my WILL and named my daughter as the inheritor of my mutual funds and shares. Is it necessary for me to change the nominee as I have named my daughter as the inheritor of my shares/equity mutual funds?
According to law, a nominee is a trustee not the owner of the assets. In other words, he is only a caretaker of your assets. The nominee will only hold your money/asset as a trustee and will be legally bound to transfer it to the legal heirs. In the case of an unfortunate occurrence, the nominees will be able to get the units transferred to their name relatively easily, compared to a case where a nominee is not specified in the folio.A folio can have up to three nominees and you can also specify the percentage allocation of units that need to go to each nominee.The nominee can be changed anytime when you wish to do the same. 1. A legal heir will be the one whose name is mentioned in the WILL. You have appointed your daughter as the legal heir in the WILL and she will get the mutual fund units. 2. The nomination in a demat account for shares will not be like that of Mutual funds. The nominee here will be the legal beneficiary of the shares. Therefore, one must take care, while selecting a nominee for this account. 3. You have appointed your brother as the nominee in the demat account and he will be the legal owner of your shares, in spite of you naming your daughter as the legal heir in the WILL. You must change the nominee of your demat account immediately from your brother to your daughter.