Nominations that actually reach the right person
During a routine review with an NRI family based in Singapore — Anand and his wife Kavita — I asked the question I ask every family, every year: "Are your nominations current on all folios?"
Anand nodded confidently. "Yes, I set them up when I started investing."
"When was that?"
"2016."
"And who is nominated?"
"My mother."
There was a pause. Anand's mother had passed away in 2021.
The folio still listed her. Four mutual fund folios, two insurance policies, and an NRO bank account — all nominating a person who was no longer alive. Nobody had updated them. Nobody had checked. The auto-debit ran, the SIPs continued, the statements arrived — and the nominations remained frozen in 2016.
"If something happened to you tomorrow," I said carefully, "Kavita would need to claim these holdings. The nominee listed is someone who cannot receive them. The claim would require a succession certificate, a legal-heir certificate, and potentially months of paperwork — from Singapore, across time zones, in a country where Kavita does not have a local address."
Kavita, who had been quiet until then, said: "How do we fix this?"
Fifteen minutes. That is how long it took to submit online nomination update requests across all four AMC portals. The insurance policies required a physical form — we couriered them from Tinsukia, signed by Anand during his next India visit.
Fifteen minutes to fix. Potentially fifteen months of anguish if it had not been fixed.
Why nominations go stale
Nominations are set-and-forget in most Indian families. You fill the form when you open the account or start the SIP. The form asks for a name. You write a name — usually your parent, sometimes your spouse, sometimes "self" on a joint account. And then you never think about it again.
Life moves. You get married. A parent passes away. A child is born. A divorce happens. A second marriage. Each of these events changes who should receive your financial assets if you are not here — but none of them automatically updates the nomination on your folios, policies, or bank accounts.
SEBI now mandates nomination for all mutual fund folios. If you have not provided one, your transactions may be restricted. But even families who have provided nominations often have not reviewed them since the initial form.
Nomination is not succession
Here is a distinction that catches many families off guard. A nominee is not necessarily the legal heir.
A nominee on your mutual fund folio or LIC policy is essentially a custodian. They receive the money on your death. But they may not be legally entitled to keep it. Under Indian succession law — Hindu Succession Act, Indian Succession Act, or personal law depending on the family — the legal heirs may be different from the nominee.
If your folio nominates your brother but your legal heirs are your wife and children, the brother receives the money — and the wife has to pursue a legal claim to recover it. This is not a hypothetical. This happens.
The fix is alignment. The nomination and the will should tell the same story. If your will says "everything to Kavita," but your folio nominates your mother (deceased) or your brother, there is a mismatch that will cause grief, delay, and expense at the worst possible time.
The Dhansanchay nomination audit
At every annual review — every single one, without exception — we check nominations across all folios, all policies, and (where the family shares the information) all bank accounts.
Five questions. Takes five minutes.
Is there a nominee on every folio? Is the nominee alive? Is the nominee the person you actually want to receive the money? Does the nominee know they are nominated? Does the nominee know which AMC/insurer/bank to contact?
That last question — does the nominee know? — is the one families miss most often. A nomination means nothing if the person does not know they are nominated, does not know the folio number, does not know which platform to log into, and does not know where the documents are.
At Dhansanchay, we maintain a one-page summary for every client family. Every folio, every policy, every account — with the nominee listed against each. The family keeps a copy. We keep a copy. If anything happens, nobody is starting from zero.
One page. Updated every April. The most boring document we produce. Potentially the most valuable.
Written for general education — not as individual investment, tax, or legal advice. Nomination and succession laws are complex and vary by religion and personal circumstances. Consult a qualified lawyer for your specific situation.