Nominee vs legal heir vs will in India — who really gets a bank account, FD, locker, insurance, shares, mutual funds and EPF after a death; up to four bank nominees from 1 November 2025; why a nominee is usually a trustee, not the owner (Ram Chander Talwar 2010, Shakti Yezdani 2023); and how families settle claims (2026)
Plain map of one of the most common family disputes after a death: the nominee receives the money but the other heirs say it belongs to all of them. What a nomination does and does not do; the new bank nomination rules (up to four nominees, simultaneous or successive) in force from 1 November 2025; the Supreme Court’s view that a nominee usually holds for the legal heirs; the special ‘beneficial nominee’ rule for life insurance and the unsettled case law; EPF nominations; what happens when there is a will; when there is no nominee at all; and practical steps for families. Educational only — not legal advice; Adhiwakta does not file claims or contact banks or insurers.
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The short answer
A nomination tells the bank, company, fund or insurer whom to pay after the holder’s death, so that the institution gets a valid discharge without waiting for a court document. In most cases it does not decide who finally owns the money — that is decided by the will (if there is one) or by the succession law that applies to the deceased (for example, the Hindu Succession Act, 1956, the Indian Succession Act, 1925, or Muslim personal law). So a nominee who is not the only heir is usually expected to hold the amount for, and share it with, the persons entitled under the will or succession law. Life insurance and some schemes have special rules, explained below.
Bank accounts, FDs and lockers — new rules from 1 November 2025
The Banking Laws (Amendment) Act, 2025 changed nominations for bank deposits, articles in safe custody and lockers from 1 November 2025. A depositor can now name up to four nominees. For deposits, the nomination can be simultaneous (each nominee gets a stated percentage, totalling 100%) or successive (the next nominee becomes eligible only if the one above has died). For lockers and articles in safe custody, only successive nomination is allowed. The Banking Companies (Nomination) Rules, 2025 set the forms. Check your existing nominations, add or update them online or at the branch, and keep the acknowledgement.
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Write in Hindi or English · general guidance, not legal advice
Is the bank nominee the owner?
The Supreme Court held in Ram Chander Talwar v. Devender Kumar Talwar (2010) that the nominee of a bank deposit only has the right to receive the money from the bank; the amount remains part of the deceased’s estate and goes to the heirs under the applicable succession law. The bank pays the nominee and is discharged; any dispute between the nominee and the heirs is then a matter between them — usually resolved by family settlement or, failing that, in a civil court.
Shares, demat accounts and mutual funds
In Shakti Yezdani v. Jayanand Jayant Salgaonkar (2023), the Supreme Court held that a nominee of shares or securities under the Companies Act (Section 72) and depository rules does not become the absolute owner; the nomination only lets the company or depository deal with the securities after death, and the heirs’ rights under a will or succession law remain. The same principle is generally applied to other investments. Nomination procedures for demat accounts and mutual funds are set by SEBI and change from time to time — check the current rules with your depository participant or fund house.
Life insurance — the ‘beneficial nominee’ rule
Section 39 of the Insurance Act, 1938, as amended in 2015, lets a policyholder nominate. If the nominee is the policyholder’s parent, spouse or child (or spouse and children), Section 39(7) says such nominee is beneficially entitled to the amount — the idea being that close family nominees get the money for themselves. Other nominees generally receive it for the legal heirs. However, some High Courts have held that even a beneficial nominee cannot defeat the rights of legal heirs under succession law, and the question is not finally settled. If there is a dispute, take advice on the latest judgments in your State.
EPF and other government schemes
Under paragraph 61 of the Employees’ Provident Funds Scheme, 1952, a member who has a family can nominate only members of the family as defined in the Scheme; a nomination in favour of someone outside the family is not valid while the member has a family. Members can file or change their nomination online through the EPFO member portal (e-nomination). Pension (EPS) and EDLI insurance benefits follow their own rules on who receives them. Small savings schemes (PPF, NSC, post office deposits), government pensions and gratuity also have their own nomination rules — read the scheme’s current rules before assuming the nominee keeps the money.
When there is a will
A valid will generally decides who owns the money, even if someone else is the nominee — the nominee receives it and must hand it over to the beneficiary named in the will, subject to the special insurance rule above. Keep the nomination consistent with the will to avoid conflict. In some places and situations, probate of a will is required before rights can be enforced in court; see the will registration and probate guides.
When there is no nominee
The institution will usually ask for documents proving who the heirs are: the death certificate; a claim form; indemnity and affidavits from the heirs; and, depending on the amount and its own policy, a legal heir certificate, a succession certificate from a civil court, probate or letters of administration. Many banks have simplified procedures for smaller amounts. See the legal heir certificate and succession certificate guides.
If there is a dispute between the nominee and other heirs
Step 1: get the death certificate and list all heirs under the applicable law (the Virasat Hissa tool on Adhiwakta can give a rough Hindu Succession Class I estimate). Step 2: before payment, other heirs can write to the institution with the death certificate, stating their claim — some institutions may then ask for a court order, though many will still pay the registered nominee. Step 3: after payment, try a written family settlement, mediation or a pre-litigation Lok Adalat. Step 4: if it fails, a civil suit for the heirs’ share (or a succession certificate proceeding) may be needed. Delay makes recovery harder, so act early.
Practical checklist for account holders
Add or update nominees on every bank account, FD, locker, demat account, mutual fund folio, insurance policy and EPF account; make a will so that the nominee and the owner are clear; tell your family where the papers are; review nominations after marriage, divorce, birth of a child or a death in the family; and keep copies of nomination acknowledgements.
What this guide is not
It does not decide who is entitled to any particular account, policy or asset. Succession law depends on religion, the type of property, the State and the facts; nomination rules of SEBI, EPFO and insurers change — check the current rules.
How Adhiwakta can help
We do not file claims, contact banks, insurers, EPFO or family members, or take sides in inheritance disputes. Adhiwakta is a facilitation platform, not a law firm. We do not file cases, appear before any authority, or promise any result. Use Ask Adhiwakta to describe your situation for general guidance from an independent advocate, or start with the AI helper to organise your facts and papers. Educational only — not formal legal advice.
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Frequently asked questions
- Is the nominee the owner of the money after death?
- Usually not. The Supreme Court has held that a bank nominee (Ram Chander Talwar, 2010) and a nominee of shares or securities (Shakti Yezdani, 2023) receive the asset but hold it for those entitled under the will or succession law. Life insurance has a special ‘beneficial nominee’ rule.
- How many nominees can I add to a bank account now?
- Up to four, from 1 November 2025 under the Banking Laws (Amendment) Act, 2025 — either simultaneously with stated percentages totalling 100%, or successively. Lockers and safe custody articles allow only successive nominees.
- Who gets life insurance money — nominee or legal heirs?
- Under Section 39(7) of the Insurance Act, if the nominee is the policyholder’s parent, spouse or child, they are beneficially entitled. Other nominees generally receive it for the heirs. Some High Courts have held that heirs can still claim, so the position is not fully settled.
- Does a will override a nomination?
- Generally yes for ownership — the nominee receives the money and must hand it to the beneficiary under a valid will, subject to the special insurance rule. Keep your nominations consistent with your will.
- Can I nominate a friend in my EPF account?
- Not if you have a family. Under paragraph 61 of the EPF Scheme, 1952, a member with a family can nominate only family members as defined in the Scheme.
- What if there is no nominee on the account?
- The institution will ask heirs for the death certificate, claim forms, affidavits and indemnity, and depending on the amount, a legal heir certificate, succession certificate or probate.
- Does Adhiwakta file nominee or succession claims?
- No. Adhiwakta does not file claims or contact banks, insurers or family members. Use Ask Adhiwakta or the AI helper for general educational guidance only.
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