Is the nominee the legal heir?

"I've added my son as nominee on everything — the flat, the bank accounts, the shares. My affairs are in order."

If you have said some version of this, you are in the majority. You are also, almost certainly, mistaken about what you have done.

What does a nominee actually get?

A nominee is a receiver, not an owner.

Nomination exists to solve the institution's problem, not your family's. When an account holder dies, the bank, the housing society, the insurer or the company needs someone it can lawfully hand the asset to — so it isn't stuck holding funds while heirs argue. Pay the nominee, and the institution is discharged. That is the entire function.

Ownership travels by a different road: succession law. If you left a will, the asset belongs to whoever the will names. If you didn't, it belongs to your legal heirs under your personal law — for Hindus, typically the spouse, children and mother sharing equally in a man's estate.

The Supreme Court has said this repeatedly across four decades. In Sarbati Devi v. Usha Devi (1984), it held that an insurance nominee merely receives the money for the benefit of the legal heirs. And in December 2023, in Shakti Yezdani v. Jayanand Jayant Salgaonkar, it settled the same question for shares and securities: a nominee under the Companies Act does not become owner; the nominee holds the assets in a fiduciary capacity (as a trustee — someone holding property for another's benefit) until succession law decides who actually takes.

The key, not the house — what does nomination really transfer?

Think of nomination as handing someone the key so the asset isn't locked when you die.

It does not give them the house. Whoever succession law names still owns everything behind the door — and can demand it from the key-holder.

Who receives and who owns, asset by asset?

Bank accounts. The nominee receives the balance; the legal heirs own it. New development worth knowing: from 1 November 2025, the Banking Laws (Amendment) Act, 2025 allows up to four nominees on a bank account, either together or in sequence. More keys — but still no house. The ownership position is unchanged.

Life insurance — the genuine exception. Since a 2015 amendment to the Insurance Act, a nominee who is your spouse, child or parent is a "beneficial nominee" and may actually be entitled to the money beneficially — not merely as a trustee. Nominate anyone else, and the old rule applies. This is the one asset class where nomination can approach inheritance, and even here, the drafting details matter.

Co-operative society flats. The society transfers the share certificate to the nominee — but courts have consistently treated that transfer as administrative. It makes the nominee the person the society deals with; it does not decide title to the flat. Title passes to the heirs or the beneficiaries under the will.

Shares and mutual funds. Squarely covered by the 2023 Supreme Court ruling: the nominee holds for the legal heirs. Demat account nominations avoid the asset being stuck — nothing more.

EPF, PPF and small savings. Governed by their own statutory schemes with their own nomination rules — the details differ, and this is exactly where generalisation gets dangerous. Check the specific scheme.

Why does this hit NRI families hardest?

Now add distance.

A parent in Mumbai nominates the child who lives nearby — the practical choice, the one who can visit the bank. The parent has three children. Two are abroad.

The parent passes away. The nominee child receives the balances, takes the society transfer, and — believing nomination means inheritance — treats it all as theirs. The siblings abroad object. Positions harden. And now the family discovers, from three time zones away, that unwinding this requires succession paperwork that takes months (a succession certificate alone commonly runs 6–18 months), possibly probate for a Mumbai flat left under a will, and — if nobody backs down — civil litigation between siblings that outlives the parent's savings.

Not one rupee of this conflict was necessary. It grew entirely out of a misunderstanding of one word.

What actually puts your affairs in order?

Nomination plus a will that says the same thing. The pairing — never the substitute.

Three questions to check your own arrangements against:

1. Do my nominations and my will name the same people, in the same proportions? A mismatch is a lawsuit waiting for a funeral.
2. Does my will specifically cover my Indian assets — and does it account for probate where it applies (a Mumbai flat under a will, for instance, needs probate from the Bombay High Court)?
3. Does anything I hold fall under the genuine exceptions — a beneficial nominee on insurance, or a scheme-specific rule on EPF/PPF?

Succession law here turns heavily on personal law, asset type and state — and the rules above have exceptions of their own. Please speak to a qualified professional before acting on your own facts.

Hope this helps someone.