Jagoinvestor
April 23, 2012
Joints Account , Nomination or Will – Which one to use ?
There are 3 ways one can pass on his wealth to someone – joint accounts, nomination and Will. A lot of people do not know which one is more powerful than the other and when to use which one. Today let’s discuss a few points about joint accounts, nominations and will and some scenarios which will make them clear.
3 mistakes which investors make
1. Not understanding what a joint account means
If you want to make sure that after your death, your wife operates the account without any problem, then don’t just make her the nominee, better make her a joint account holder in the bank account itself.
If you choose “either or survivor” mode, she will be able to transact and do things along with you. But remember that when you make her a joint owner, she is the owner of 50% part only. If something happens to you, she will not automatically get your 50% share. It will be divided as per your WILL or will be divided as per succession laws.
2. Forgetting about old joint holders
A lot of people have joint accounts with their father, mother, brother etc years back, but now they want to pass on their wealth to their children/wife on their death, so they put their names in the nominee and also write a WILL (for full proof documentation), but once they die, the nomination and WILL be of no use, because there is still a joint account holder and their share cant be touched. So better change the joint account holder if you wish to pass on that part to someone else in the family.
3. Not changing Old nominations and WILL
A lot of people do not change the nominations of their bank accounts, mutual funds, or life insurance policies due to laziness, someone else is on the nominee list, but they want to transfer the asset to someone else. A lot of people think that making a WILL is the final solution, but in real life, there can be complications. What if the nominee and the person mentioned in a WILL are different? The nominee can take out cash from the bank or do some transactions. Then the legal owner will have to run from pillar to post to claim that money back and do all the legal work. See this classic issue of forgetting about the WILL
Hi , I am facing a big issue .. My husband had written a WILL long back stating that all the wealth should go to his brother after his death, but this happened years back, when we were having a lot of issues in marriage and fights, but after that everything was fine and things were on track. But seems like my husband never wrote another WILL after that and didnt change the WILL. He died recently in an accident and now his brother has claimed all our property and bank balance because of that WILL . What can I do ?
Truly speaking, This lady can’t do anything … her husband was ignorant about these things and now she will pay for his mistakes!
Some best practices
- If you are 100% sure that your wealth should go to some specific person, always have a joint account with that person with you as the primary person and also write a WILL for your share, so that it also can be passed to them seamlessly later.
- Make sure your nominee should be the same person you want to pass on some policy proceeds or property, It does not make sense to say in WILL that your wealth should go to A, but in nominee the name mentioned is B.
- If you have opened any accounts/properties/mutual funds/policies long back, it’s a good idea to revisit it and see that the nominee name is appearing and is consistent with what you want it to be.
Joint Accounts, Nominations and Wills are all ways to pass on your wealth to someone else once you die, so it is very important that you structure these in the best possible manner. Have consistency in all these 3 things. If you pass on your money to a person better open an account or buy the asset along as a joint owner, make sure you put his name as the nominee and also make sure that the WILL is written with clear directions.
My father had a either/survivor joint account with his “daughter in law” in a leading pvt bank in Delhi. After my father passed away in 2013, his daughter in law refused to show any details to his wife(my mother) even after making several requests. I consulted with bank but they provided me a written(in e-mail) in which bank advised to contact survivor in case to get any account details. As I have read, survivor is only a guardian in such account and has to hand over deposited balance money and account details to legal heirs of primary account holders. Including, I made a request to bank to remove my father’s name from joint account for further misuse. Bank did that.
My question is that can legal hires of primary joint holder has no right to claim a penny in such account, please advice
No, a joint account survivor is the account holder after the primary from what I know .
My father transferred a hefty amount in my savings account as a wedding present to me. Post marriage, I attached my husband’s name to it, we now jointly hold the savings account. From which we hold the FDR under either or survivor policy. Can I liquidate the policy before its maturity on my own or do I need his permission to do it.
Hi inderpreet
Yes, you can as its under either or survivor.
We are two nominee in the will of my Father I want to transfer nominee I only nominee after him all are agree for that proposal but I want to give 50% amt to my brother. Can bank will give the home loan for this nominee transferring
I am not sure on this
thank you
Previously i had asked you about nominee in house property
but i want to ask you whether nominee is more quick procedure or joint co-owner procedure? i was suggested by my niece who is studying law that to become co-owner the property should be shown as gift deed is it right?
I cant be sure on this . Better hire a lawyer !
our house is in my husband’s name
but now he wants to add my name as nominee
what is the procedure for it?
do i have to give letter to sub-register office
Yes, that name change has to happen in the documents of house. Better catch a good consultant for this.
Can i have a joint account with my boyfriend
Can a person be a nominee if he is a friend
Yes is the answer !
Head of the family dies recently without a WILL. He has self acquired properties in different places. He has the following in the family:
Wife,
2 Daughters,
one Son died 2 years ago (Wife and 2 minor daughters presently living)
What is the Succession Rule and how (in what %) applied?
Kindly help us in understanding.
Wife 1/4
2 Daugthers 1/4 each
wife + 2 minor daugthers 1/4 between them
MY Father Has a joint acount with my tauni. my father died on 29/12/2015 , now can we claim 50% share our money.
No , Joint account holder is 100% owner in this case .
Hi,
Nice article. I have a query.
1) A commercial property is owned by a Son jointly with his Mother.
In Nomination, as a First Holder, Son wishes to nominate Mother and Mother (as a Joint holder) wants to nominate her husband. Is this allowed ?
2) A commercial property is owned by a Son (Minor) jointly with Mother.
Here too, the Son wishes to nominate his Mother but can a Minor nominate ? And Mother wishes to nominate her husband. Is this allowed ?
Awaiting your expert comments.
Thank you
I think we are not qualified to comment on this . You need to meet a good property lawyer !
HI
1.I WANT TO INVEST IN MUTUAL FUND (ME AS 1st HOLDER AND 2nd HOLDER MY WIFE).
WHAT WILL BE THE TAX TREATMENT OF
LONG TERM CAPTIAL GAIN ?
OR
SHORT TERM CAPITAL GAIN ?
2. IF I INVESTED IN MOTHER NAME AS 1ST HOLDER AND ME IS 2nd HOLDER
WHAT WILL BE THE TAX TREATMENT OF
LONG TERM CAPTIAL GAIN ?
OR
SHORT TERM CAPITAL GAIN ?
PLEASE HELP
JITESH G.
No matter who is investing , the taxation is same
Please clarify. I assume first holder must show the income in Income Tax declaration. Joint second holder is not liable to pay any tax??
It will depend on the source of the income. First holder is liable for tax related declaration for all the investments done on their name. So check the source of the income/profits and that person will be liable for tax. Its a myth that only the first holder has to deal with tax issues just because they are the primary holder.
Manish
if A and B is a joint share holder and they have elected C as nominee , if A dies then all rights and shares would be tranfer to B.. can b have a right to change nominee..??
YEs, B can then change the nominee
Hello.
My inlaws who no more exist have put my wife and sister in laws name as nominee on their flat. My wife and sister in law are the only two children they have. I would like to know the following…..
1) what will be the tax implication if we sell the property,on both the sisters?
2) What will be the tax liability on my wife if my sister in law purchases the property at a consideration of X amonut?
Will appreciate a quick reply.
Hi Abhay
A CA is more qualified to answer you query, hence I suggest better get in touch one.
We are not right people to talk on this
Manish
My father died on 26th May, 2015, He had made eight term deposit with me as either or survivor , my brother claims the 50% share of those term deposit.What I will do?
No , your brother has no share in that !
My father opend fd and account in SBBJ, rajasthan in our village long back, we settled in bihar. Now father is no more he didnt worte any will and account dont have any nominee, when my mom went to SBBJ branch for FD settelment and account closing, Bank is refusing to settel down claim..asking my mom to show her and my father local address proof and local id of that village where my father holds account. We have death certificate of Bihar state, voter id of bihar, pan card, ration card.
Isn’t death certificate of any other state of id proofs of any state is valid in all over india. is there any kind of rules that one should have to furnish seprate ids for ever states in india. Please suggest regarding this, can we take any action on bank regarding this
Hi Aman
Any state death certificate should be valid. What they actually need is a legal heir certificate. Truly speaking you guys will be facing a lot of issues in this and will have to run around a lot for documents.
Hi i opened a joint account with first name as mine n sevond name as my wife. I want to change her as first name n me as second ….wil it b possible…..? How
That only bank can confirm !
I have a joint account with my wife. i have given nominations for my depsits .I have also made a will and mentioned that the deposits can be claimed by my children as nominees only after the death of my wife and my wife should enjoy as long as she lives in othe words with full rights on all the deposits. Is this right?
Yes, its good enough . Make sure the WILL is registered !
Hi, the article is realy informative. I have a further question, What is the staus of FD’s held jointly in the event of death of first holder.
1. Can the FD be continued by the second holder/survivor if the second holder desires.
2. If Answer to 1 is “yes”, then will the ownership FD change – as the ownership for purpose of tax liability is of First holder.
3. What is the tax implication , i mean who will be liable for tax
1. Yes
2. Yes, it can be changed, you will have to meet the branch manager for this and put a request for that
3. It will be second holder
Mr. Chauhan
Pls read my message of 18.10.2014 and guide me ahead !
Hallo dearest Mr. Chauhan,
Thanks for your quick reply mistakenly sent to me, as there is no case of death and lega heirs as yet. There is dispute among the joint account holders. It has been asked to the bank for the payment on maturity by me and one more depositor of this account, so the bank considors it as disputed. So please guide me as per problem .
Thanks.