Often, when opening a bank account, we are asked for the name of a nominee so that in the event of the account holder's death, the bank can easily transfer the deposited amount to the person they have nominated. But what happens to the money deposited in the bank if both the account holder and the nominee die? Few people know the answer to this question, although this situation can arise many times. In such a case, it is very important to know what the procedure is according to banking rules.
If the Nominee Also Dies, Who Gets the Money?
If the account holder dies and the nominee is alive, the bank hands over the entire amount in the account to that nominee. But if the nominee has also died, or dies later, the matter becomes complicated. In this situation, the bank transfers the amount to the person or persons who are the legal heirs of the account holder.
Who are Legal Heirs?
Legal heirs are the person or family members who are entitled to a share in the property under inheritance law. These may include the spouse, sons and daughters, parents, or siblings. If the account holder has not made a will, the bank can hand over the amount to the legal heirs after identifying them.
What Documents Need to be Submitted to the Bank?
In such cases, the legal heirs have to submit some necessary documents to the bank. The main documents among these are:
- Death certificate of both the account holder and the nominee
- Identity card such as Aadhaar card, PAN card, etc.
- Proof of being a relative of the account holder (such as ration card, copy of family register)
- Legal Heir Certificate
- Letter of Disclaimer from the remaining heirs if there are multiple heirs and only one person is claiming
If the matter is large and there is no consensus among all the heirs, a Succession Certificate can also be obtained from the court.
What if There is a Will?
If the account holder has made a will during their lifetime, in which they have clearly written who should receive the bank account balance after their death, the bank releases the amount based on the same will. However, the bank has to verify the authenticity of the will for its recognition, and sometimes the will also has to be verified by the court.
What Does the Law Say if There is No Will?
If no will has been made, then Indian inheritance law applies. For example, under the Hindu Succession Act, 1956, the spouse and children can first get an equal share in the property. If the spouse is not alive, then parents and siblings are placed in the next category.
Most People are Unaware of These Rules
In India, there are a large number of people who do not know the banking rules and the process of succession. There is still awareness about adding a nominee's name, but it is important to know how important the legal process becomes when the nominee is no longer alive.
If no one claims that account for a very long time and no valid heir reaches the bank, then after a few years that amount is transferred to the Depositors Education and Awareness Fund (DEAF). This fund is under the Reserve Bank of India and the process of claiming the money in it is determined separately.
Always Keep Important Documents Safe
To save family members from troubles in such cases, it is important that things like death certificates, identity cards, and wills are kept safe. Also, family members should be informed about where these documents are kept, so that there is no confusion in the future.
In such cases, the bank takes every step carefully so that the money reaches the right person and no legal dispute arises later. Therefore, it is very important to update banking procedures and documents related to succession from time to time.
