Most people who invest carefully for decades spend almost no time on what happens to those investments when they die. Many assume that adding a nominee to each account settles the matter. It often does not.
The decision to make a will is one of the simplest and most valuable steps an investor can take. This article explains why a will matters even when nominations are in place, what it should cover for investors, how to make one validly in broad terms, the most common mistakes, and when to involve a lawyer. It is general information, not legal advice; succession law is complex and depends on your circumstances and personal law.
Nominee versus legal heir
A nominee is the person to whom a bank, depository, fund house or insurer will transfer the asset when the holder dies. Nomination makes the transfer quick and avoids the account being frozen while the family proves who is entitled.
But transfer is not the same as ownership. Courts in India have generally held that, for many kinds of assets, a nominee receives the asset to hold on behalf of those legally entitled to it, who are decided by a will or, without one, by the succession law that applies to the deceased. The position differs between asset types and has been the subject of litigation, so take legal advice for your situation.
The practical problem: if your nominee and your legal heirs are different people, or if you have nominated one family member for convenience, the family can end up in dispute. A clear will that is consistent with your nominations reduces that risk greatly.
What happens without a will
When someone dies without a will, their assets pass according to the succession law that applies to them, which depends on their religion and circumstances. The result may be very different from what they would have wanted. A spouse may receive less than expected, or assets may be split among relatives in ways that create joint ownership nobody wants.
The family may also need to obtain documents such as a succession certificate or letters of administration for some assets, which can take months and involve court processes and costs.
For investors with shares in physical form, old accounts, or assets in several places, the absence of a will can make the process far slower. A will cannot avoid every formality, but it gives clear instructions and an executor responsible for carrying them out.
What an investor's will should cover
An executor. The person responsible for carrying out the will. Choose someone trustworthy and organised, and ask them first. A backup executor is sensible.
Beneficiaries and shares. Who receives what. This can be specific (these shares to this person) or proportional (the rest of my estate divided equally among my children). Proportional wording avoids problems when specific holdings change.
A residuary clause. What happens to anything not specifically mentioned, including assets acquired after the will is written.
Guardianship for minor children, and how money for them should be held until they are adults.
Alternate beneficiaries, in case a beneficiary dies before you.
A description of assets sufficient for identification: demat accounts, mutual fund folios, bank accounts, provident fund, insurance, property, and digital assets. Avoid listing exact balances, which change; list the accounts.
Keep the will itself clear and simple. A separate, regularly updated list of accounts helps the executor find everything.
Making it valid, in broad terms
Writing. The will should be in writing and clearly express your intentions. It can be typed or handwritten.
Signing and witnesses. Generally, you sign the will in the presence of two witnesses, who also sign. Witnesses should not be beneficiaries or their spouses, since that can affect what those beneficiaries receive.
Registration is optional in India. Registering a will with the sub-registrar is not mandatory, but it creates an official record and can make challenges harder.
Soundness of mind. You must understand what you are doing. For older people or those with health conditions, a doctor's certificate at the time of signing can help prevent disputes.
Personal law. Some personal laws limit how much of your estate you can leave by will, or to whom. Check this with a lawyer if it may apply to you.
Updating. A later will normally replaces an earlier one; state this explicitly. Small changes can be made with a codicil, signed and witnessed in the same way.
Steps to make a will, in order
1. List what you own and owe. Every account, policy, property and loan. A separate record of accounts, updated yearly, makes this quick.
2. Decide who receives what, including alternates if a beneficiary dies first, and who should look after minor children.
3. Choose an executor and ask them to accept the role.
4. Check your nominations on every account and align them with your intentions.
5. Draft the will, using a lawyer for anything beyond a simple estate, and read the draft carefully.
6. Sign it before two witnesses, who sign too, ideally with dates and addresses recorded. Consider registration and, where relevant, a medical certificate.
7. Store the original safely and tell the executor where it is.
8. Review it after every major life event and every few years regardless.
Anyone who wants to make a will but keeps postponing it can start with steps one to three this week; they take an evening and make the rest straightforward.
Common mistakes and good habits
Nominations that contradict the will. Review nominations on every account and align them with the will.
Never updating it. Marriage, children, divorce, a death in the family, or large changes in wealth are all reasons to review.
Nobody knows where it is. Tell your executor where the original is kept.
Vague wording. Phrases like "my investments" or "my family" invite disputes. Be specific about people and proportions.
Ignoring joint holdings. Joint accounts usually pass to the surviving holder first; consider how that fits your wishes.
Using a template without thought. Online templates can help, but a lawyer's review is worth the modest cost for anyone with significant assets, blended families, property in several places, or a business.
An account where nominees are easy to update
Hold shares and direct funds together, and keep nominations current alongside your will. Free to open
Succession law, nomination rules and procedures depend on personal law, asset type and regulation and change from time to time. This is general educational material, not legal, tax or investment advice; consult a qualified lawyer for your situation. We run no tips group and no signal service, we manage nobody's money, and no return is promised.
Disclosure: the account-opening link on this page is under Atul Shrivastava's Zerodha Authorised Person registration (NSE AP Reg: AP2516003481; Zerodha Broking Ltd. SEBI Reg: INZ000031633) and earns a revenue share. TheFinBaba is not a SEBI-registered Investment Adviser — this content is educational, not investment advice.
Frequently Asked Questions
Do I need a will if I have nominees on all my accounts?
Usually yes. Nomination makes transfer easier, but courts have generally held that a nominee may hold assets for the legal heirs rather than own them outright. A will decides who is entitled.
Does a will need to be registered in India?
Registration is optional. A will is generally valid if written, signed by you and attested by two witnesses, though registering it creates an official record.
What happens if someone dies without a will?
Assets pass under the succession law that applies to them, which may not match their wishes, and the family may need court documents for some assets.
Can a beneficiary be a witness to a will?
It is best avoided, since a beneficiary or their spouse acting as witness can affect what they receive under the will.
How often should I update my will?
After major life events such as marriage, children, divorce or a death in the family, and whenever your assets or wishes change significantly.
Related Reading
- A record your family can actually use
- Setting nominees on every account
- What heirs face with old shares
- Protecting dependants first
- Planning money as a couple
- Accounts held for others
Disclaimer: TheFinBaba provides educational content only - this is not investment advice. Trading involves risk of loss.
