Definition
Legal Heir vs Nominee
A nominee is the person you authorise to receive an asset after your death, but a legal heir is the person actually entitled to inherit it — and the two are not always the same.
Indian law generally treats a nominee as a custodian or trustee who receives the asset to pass it on to the rightful heirs, rather than as the ultimate owner. So naming a nominee for your bank account, insurance, shares or mutual funds ensures a smooth handover, but the money or asset still belongs to the legal heirs as determined by your will or by intestate succession.
This distinction causes frequent confusion and disputes — for instance, a nominee sibling may have to hand the asset to the deceased's spouse and children who are the legal heirs. Keeping nominations updated and, crucially, making a will that names beneficiaries clarifies who finally gets what and avoids litigation.
Related terms
- Will (Testament)A will is a legal document in which a person states how their assets should be distributed after death and who should carry out those wishes.
- Intestate SuccessionIntestate succession is the distribution of a deceased person's assets according to statutory law when they die without leaving a valid will.
- Succession CertificateA succession certificate is a document issued by a civil court that authorises the legal heirs of a person who died without a will to collect debts and securities owed to the deceased.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.