“Many people have nominees who are not their legal heir, which later creates confusion. My advise is, make a will to clarify your wishes, and to avoid confusion, make your will and nominations in favor of one person,” said Mr Vimal Punmiya, veteran chartered accountant and property expert. He was speaking at the 100th seminar organized by Moneylife Foundation.
He said nominee is like an executor, who is entrusted to manage the property or asset as per the nominator’s wishes after his death. But a nominee cannot sell property unless he is a legal heir. “Also, after his (nominee’s) death, his heir cannot act as a nominee for that asset. In addition, if the nominee passes away before the nominator, a new nominee must be appointed. If nominee dies after the death of the policyholder, but before receiving policy money, then also nomination becomes ineffective and the money can be claimed only by the legal heirs of the policy Holder.
He said, “Under section 18 of the Registration Act the registration of a will is not compulsory. But it is strong legal evidence, if there is a quarrel latter, that the proper parties had appeared before the registering officers and the latter had attested the same after ascertaining their identity.”
When asked about a will in favor of someone who is not the natural heir, Mr Punmiya said, “I would still advise that you mention clearly what you want. Suppose your elder son is the heir by succession, but you want to leave everything to your younger son, mention clearly that you have allotted some money to the elder one, or that you do not wish to leave anything for him because he is doing well for himself, and then, making a list of your assets, mention that all these you leave in the favor of the younger son.”
Mr Punmiya also talked about the several procedures involved in transfer of property or other assets after the death of a nominator. “I would advise everyone to keep copies of nomination forms, share certificates and other relevant documents because many times, cooperative housing societies lose the forms,” he said. In case someone loses share certificates, one must apply for issue of duplicate certificate. The moment duplicate certificate is issued, the original ceases to exist, Mr Punmiya said while sharing his own experience during a journey.
When asked about properties left by NRI citizens abroad, he said, “For such matters separate wills must be made, one for the properties abroad, and other for properties in India.”
When asked about the place of registering the will, he replied that it is usually done from the place where the testator (the person making a will) holds a voter-ID card or ration card or any such residence proof. But if someone goes elsewhere and passes away, he can make a will before his death and that will be valid.
When asked about the needs of special children, he said that setting up a trust in the name of that child with a trusted executor is commendable.
Mr Punmiya also talked about liabilities of taxation of heirs and nominations in property matters. He said, “If a property is jointly owned, the owners can each appoint their own nominees, or can nominate a single person together.”
He also said that assets which are unaccounted for can be willed and after six years have passed when the assets were acquired, they cannot be taxed. “For example, if someone leaves some jewellery which is not unaccounted for, income tax officials cannot seize the ornaments or demand tax six years after the heir has acquired them,” he said.
“Co-operative housing society has no power, except provisionally and for a limited purpose to determine the disputes about who is the heir, or legal representatives. The society is only meant to provide for interregnum between the death and the full administration of the estate and not for the purpose of conferring any permanent right of such person to a property forming part of the estate of the deceased,” Mr Punmiya added.
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