Nomination, joint names and a Will serve different legal and practical purposes. Treat them as complementary tools, not substitutes. Use nominations for claim facilitation, joint names for operational convenience (with caution), and a will for directing who gets your assets under succession law.
There are Myths around these topics, and it is not uncommon to see a family or friend suggesting half-baked misleading suggestions. These three topics are often mixedup in India, and misunderstandings can cause family disputes, delays and money getting “stuck” after you are gone. Below are common myths, the reality in plain language, and quick practical tips you can act on today.
A. Myths & realities about adding a nominee
Myth 1: “Naming a nominee means they automatically inherit the asset.”
Reality: A nomination helps the bank/insurer/Fund pay out quickly to the nominee. It does not, by itself, change who legally owns the asset in the eyes of succession law. Family members or legal heirs can still claim their share; in many cases, the nominee holds the money on behalf of the heirs until legal succession is settled.
Myth 2: “A nomination overrides a will.”
Reality: NO, a valid WILL directs the distribution of your assets. A nomination is procedural for some financial products (insurance, mutual funds) the nominee gets the initial payment, but courts can enforce the will or succession law if there’s a conflict.
Myth 3: “Name a child as a nominee and they’ll get the money even if a minor.”
Reality: Banks and insurers may pay the nominee, who is a mino,r to the guardian, but this can create legal complications. Often, it’s safer to name a trustee or guardian and state this clearly in your will, and/or use a minor’s guardian fund or specific custodial arrangement.
Myth 4: “Nomination is all you need and no need for a Will.”
Reality: Nomination speeds up claims for specific instruments but does not handle immovable property, jointly owned assets, or complex instructions like bequests, trusts, or guardianship for minors. A will is still essential for overall estate planning.
Also read: Late Start to Investing: A Guide for Approaching Retirement
Managing Your Provident Fund: Contributing via VPF
Quick tips for nominees
– Keep nominations up-to-date after marriage, divorce, births, deaths, and large asset changes.
– Use clear nominee details (name, relation, Aadhaar/PAN where required).
– If you name a minor, also record the guardian in your will and consider a trust arrangement.
– Maintain a one-page asset list that shows nominee entries and the location of original nomination forms.
B. Myths & realities about adding joint applicants’ names (joint accounts, joint property)
Myth 1: “Adding my adult child as a joint account holder avoids the need for a will or probate.”
Reality: Joint accounts make account operation simple (withdrawals, payments), but they do not always resolve legal succession for the entire estate. On death, the surviving joint holder can access funds, but other legal heirs may still have claims, and disputes can follow. For immovable property, “joint ownership” might mean different legal shares depending on how the title deed is drafted.
Myth 2: “Joint ownership equals equal shares.”
Reality: Not necessarily. In property or business accounts, shares depend on title wording (names, share percentages, ‘joint tenants’ vs ‘tenants-in-common’) and evidence of contribution. Banks often treat the survivor as entitled to the balance in deposit accounts, but this is not the same as legally distributing estate shares.
Myth 3: “Making a child a joint holder ensures they won’t contest my will later.”
Reality: No. Joint title can make transfers easier but can also be misused (premature withdrawal), and it doesn’t preclude legal challenge. It may even cause family tension if other heirs feel bypassed.
Myth 4: “Add my child as joint holder so they will manage things if I’m ill.”
Reality: Operational convenience is a valid reason, but better alternatives exist: limited Power of Attorney (POA) for specific tasks, nominee entries, standing instructions, or a trusted executor in your will. POA ends at death and must be used carefully; rogue POAs can be abused.
Quick tips for joint names
– If you add a joint holder for convenience, document the purpose in writing (operation vs inheritance) and keep evidence of your intent.
– Consider a limited POA for day-to-day management instead of full joint ownership.
– For property, clarify ownership type on the title deed (‘joint tenants’ vs ‘tenants in common’) and record shares if intended.
– Avoid adding a younger person as joint owner solely to “avoid taxes” — that can be viewed as gift and have tax/claim consequences.
C. Myths & realities about writing a will while you are alive
Myth 1: “Making a will causes family fights or invites trouble.”
Reality: A clear, well-drafted will usually reduces miscommunication and fights because it states your wishes clearly. Lack of a will often leads to disputes and court cases that are longer and more costly.
Myth 2: “You can’t change a will — it locks you in.”
Reality: You can revise or replace a will anytime while alive, as long as you are of sound mind. Keep versions dated and revoke prior wills clearly.
Myth 3: “If I have nominations and joint accounts, I don’t need a will.”
Reality: Nominations and joint accounts are partial tools. A will coordinates everything — property, gifts, guardianship for minors, debts, funeral wishes and who will handle estate settlement.
Myth 4: “A will is only for the very rich.”
Reality: Everyone with assets, dependents, or specific wishes should have a will. Even small estates benefit from clarity — who gets your valuables, who takes care of your pets, or who raises your children.
Quick tips for writing a will
– Use a lawyer or reputable will-drafting service to avoid ambiguous language. A simple will can be legally valid if properly signed and witnessed.
– State executor name and alternates, and the location of the original will.
– Be explicit about immovable property, business interests and digital assets.
– If you have complex distributions (minor children, trusts), consider professional estate planning instruments.
– Keep will updated after major life events (marriage, divorce, children, property sale/purchase).
Cross-cutting myths that create the most trouble
– “Nominee = owner.” (False for most assets.)
– “Joint holder never causes problems.” (False — it can simplify operations but complicate inheritance and taxes.)
– “A will invites disputes.” (False — ambiguity invites disputes; a will reduces them if done properly.)
Practical checklist (what your family should know/do)
– Maintain a one-page “Access Card”: where the will is, executor, lawyer, bank manager, nominee list, digital account access method.
– Update nominations for bank accounts, mutual funds, insurance, EPF/PPF/NPS and demat periodically.
– If you must add a joint holder, document the reason (convenience vs gift) and consider limited POA instead.
– Make a simple, signed will and store the original in a safe place; tell executor where it is.
– If naming a minor nominee, also name a guardian in your will and specify how funds should be used.
– Consult a lawyer for immovable property, complex estates, or when family situations are sensitive.
When to get professional help
– If you own property, run a business, have children (especially minors), have dependants with special needs, or want to create trusts/annuities, consult a lawyer or certified financial planner.
– For tax planning, consult a tax advisor — transfers, gifts and inheritance can have tax implications in India.
Do the three tasks together: keep nominations updated, avoid adding joint holders lightly, and write/keep a will. They work as a team: nomination speeds payment, joint names can ease operations, and a will ensures your last wishes are legally clear.
