A nomination does not make someone the owner of your assets. Under Indian law, a nominee is a trustee — a caretaker who collects the money and holds it until the legal heirs claim it. A registered will, by contrast, determines who actually inherits. Millions of Indians fill nomination forms at banks, in EPF accounts, and on insurance policies believing that settles the question of who gets their money. It does not.
What nomination actually does — and what it doesn't
The Supreme Court of India addressed this directly in Sarbati Devi v. Usha Devi (1984 AIR 346), where the Court held that a nominee under Section 39 of the Insurance Act, 1938, is not a beneficial owner — only the hand authorised to receive the amount and obtain a valid discharge for the insurer. The ruling confirmed what the text of most financial statutes already implies: nomination is an administrative mechanism, not a succession instrument.
The Banking Companies (Nomination) Rules, 1985, framed under Section 45ZA of the Banking Regulation Act, 1949, make this explicit. A nominee's right is limited to receiving the deposit from the bank — the bank is discharged once it pays the nominee. What the nominee does with those funds is governed entirely by succession law. If the deceased left a valid will, the nominee must hand the money over to the beneficiary named in the will.
The same logic applies to shares. Section 72 of the Companies Act, 2013, and the corresponding SEBI (Depositories and Participants) Regulations treat nomination as a facilitating mechanism only. Courts have consistently held that legal heirs can recover securities from nominees if the will directs otherwise.
Where nomination does carry final weight
Employee Provident Fund (EPF) is commonly cited as an exception, though the position is less clear-cut than often stated. The Employees' Provident Fund and Miscellaneous Provisions Act, 1952, together with the EPF Scheme (Paragraphs 61 and 70), provides a nomination mechanism, and the EPF amount is protected from attachment under Section 10(2) of the Act. However, Indian courts — including the Andhra Pradesh High Court — have consistently held that an EPF nominee receives the fund in the same capacity as an insurance nominee: as the person entitled to receive it, not as its absolute owner. The funds must ultimately be distributed to legal heirs in accordance with their personal law. Section 6A of the Act establishes the Employees' Pension Scheme (covering superannuation, widow, and children's pensions) and does not create a separate succession rule overriding the Indian Succession Act.
Gratuity under the Payment of Gratuity Act, 1972, operates similarly. Section 6 of that Act makes the family definition and nominee entitlement exclusive, so a will directing gratuity to a third party outside that defined family has no legal force.
Insurance policy nominations present a middle ground. The Insurance Laws (Amendment) Act, 2015, introduced the concept of a "beneficial nominee" — essentially a spouse, child, or parent named as nominee. Under the amended Section 39 of the Insurance Act, 1938, a beneficial nominee receives the proceeds as an absolute right, not as a trustee. For all other nominees, the old trustee position applies and the will can override.
When your will controls the outcome
For most assets — bank savings accounts, fixed deposits, mutual funds (other than EPFO), publicly listed shares, real property — a registered will takes precedence over a nomination. The chain of authority runs: valid will → probate (where required) → distribution to legatees. A nominee who tries to retain assets in defiance of a will is in breach of trust and can be sued for recovery.
Probate was, until recently, mandatory in Mumbai, Chennai, and Kolkata under Section 213 of the Indian Succession Act, 1925 for wills made by Hindus, Buddhists, Sikhs, Jains, and Parsis. The Repealing and Amending Act, 2025 (which received Presidential assent on 20 December 2025) omitted Section 213 entirely, making probate optional across India. Banks and share registrars may still require it as an institutional safeguard, and obtaining probate remains an optional but protective step — particularly useful where the will is likely to be contested. Factoring the probate timeline into estate planning is still worth doing — delays of 12 to 24 months are common in major courts if contested proceedings arise.
Joint accounts with a survivorship clause ("either or survivor") do pass to the surviving account holder immediately, regardless of what the will says. That is not technically nomination — it is a contractual survivorship right.
The gap that catches families off guard
Consider a common pattern: a man opens a savings account in the 1990s and nominates his father. He marries, has children, makes a will leaving everything to his wife and children, but never updates the bank nomination. He dies in 2026. The bank pays the father (still alive) as nominee. The father is now legally obligated to hand that money to the wife and children under the will — but if the family relationship is strained, or the father himself dies before transferring, litigation follows.
This is not hypothetical. Succession disputes over bank deposits where nominations and wills conflict are among the most common civil matters in district courts. The problem is structural: banks process nominations as pure paperwork and have no obligation to cross-check against a will. The entire burden of alignment falls on the individual.
A second gap involves digital assets and demat accounts. SEBI's 2023 circular on Nomination in Securities Market mandated that all demat account holders either nominate or explicitly opt out by June 2024. Many investors complied with the SEBI deadline and added a nominee — often a spouse or sibling — without updating their will to address what happens if the nominee predeceases them or if they want a different distribution. The nomination form and the will now conflict, and most holders do not know it.
How to align your nominations and your will
The safest approach is to treat nominations as administrative placeholders and the will as the binding document. Three practical steps follow from that:
First, audit every financial account — bank, demat, EPF, insurance, NPS — and list the current nominee. Match that list against your intended beneficiaries. Discrepancies are common after marriage, divorce, or the death of a previously named nominee.
Second, update nominations and your will together as a single exercise, not as separate events. Many people update the will after a life event but forget the bank nomination forms, or vice versa. Forms for this purpose are straightforward to complete — a comprehensive will for India is one of the key documents you should have in place before finalising any nomination changes.
Third, consider whether a specific bequest in the will can short-circuit potential disputes. If you name the same person in both the nomination and the will for the same asset, there is no ambiguity for anyone — the bank, the nominee, or the legal heirs.
What probate means for enforcement in 2026
A will without probate is technically valid but practically unenforceable for certain assets. Banks and mutual fund houses in particular are cautious. SEBI's circular on transmission of securities requires either probate or a succession certificate (under the Indian Succession Act, 1925, Sections 370 to 390) for transfers above threshold values. Probate is no longer a legal pre-condition since the omission of Section 213 by the Repealing and Amending Act, 2025, but many institutions continue to request it as a matter of internal policy.
The threshold for requiring a succession certificate versus a simpler affidavit-based process varies by institution — some banks use ₹5 lakh, others ₹15 lakh, and the guidelines are not uniform. Getting a succession certificate from a district court takes anywhere from three months to over a year depending on the jurisdiction and whether the proceedings are contested.
One practical solution is to ensure that the total value held in any single bank's accounts stays below the institution's self-imposed threshold wherever possible, allowing simpler transmission. For larger estates, registering the will and obtaining probate promptly after death is the only reliable path.
The nomination-as-trustee principle in plain terms
Strip away the legal framing and the rule is simple: the bank hands money to whoever is listed as nominee because that is the least-friction way to discharge its duty. The law then expects the nominee to act as a responsible intermediary and pass the money to whoever the deceased actually wanted to have it, according to the will.
That expectation works when families are cooperative. When they are not — when the nominee is an estranged relative, a former spouse, or someone who died before the account holder — the result is delay, expense, and sometimes permanent loss. Keeping nominations and wills in alignment is the single most effective step to prevent that outcome.
Succession law in India is fragmented across personal law statutes (Hindu Succession Act, 1956; Indian Succession Act, 1925; Muslim Personal Law), with EPF and insurance sitting in their own legislative enclaves. No single document can address all of it. But for the majority of financial assets held by most middle-class Indians, a properly drafted and registered will, with matching nominations, closes the most common gap between what you intend and what actually happens.
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This article is general information, not legal advice — see our accuracy & editorial policy. Confirm the cited law is current before relying on it.