Doctors, Is just Nomination Sufficient for You?


It’s no new that how because of doctors learning and practising standards they are left with very less time for their family and handling other nitty-gritty of life. It is the profession that comes with a challenge where making even a small mistake can lead to leaving you out on all saving of money and reputation. When such severe things are at stake there are few things that go unnoticed. When you work so hard for money and service to humankind you simultaneously put your money at your convenient investment avenue and no investment is just made in vain, it always starts with a dream to plant a seed and nurturing it with care to achieve the long term aspirational goals of one’s financial life. 

Importance of Nomination

doctor savings

Image Source: Image by Charles Thompson from Pixabay

But doctors, you need to be careful because irrespective of where you keep your money– in a bank account, in the form of savings or other deposits, create a safety net for your loved ones in the form of Insurance. Invest in shares and mutual funds with goal-planning, EPF, PPF, and other money keeping avenues. 

It is always mandatory to assign nomination to each avenue irrespective of where you keep your money. You work so hard and save for your dear ones to provide them with every means of comfort as per your capacity but, is putting nomination to your hard-earned money enough in discarding your responsibilities?

As quotes by Mr Edward deBono, “Perception is real even when it is not reality.” The same can be said about assigning nominees to your investments. Do you know that the nominee only gets the right to act as a trustee and take care of the assets whereas, a legal heir is the entitled owner of those assets?

Why is Legal Will Important?

Most of the time when I interact with the clients or people, in general, they have a perception that appointing a nominee is enough and underestimate the significance of having a legal will in place.

Although a will is a legal document, there isn’t any prescribed form it must take. For instance, you don’t need to write a will on a stamp paper and it can be either typed or handwritten. However, a handwritten will is preferred as it is more difficult to refute. According to the Indian Succession Act of 1925, anyone who is of sound mind and not a minor can make a will. 

To simplify, let’s take the example of Dr Manish. He has a life insurance cover and he made his brother a Nominee in it. Unfortunately, he died & in his WILL he expressed his desire to pass the benefit of his Insurance policy to his wife Anjali (his legal heir). 

In this case, Insurance Provider will the insurance proceeds to his brother Laxman. In this case, Laxman cannot use the funds received as he is only the Trustee of funds received but not the rightful owner of funds. That shows clearly that Nominee just has the right to receive and hold the funds but he can not own the funds without authorisation of legal heir. 

As per the WILL of Dr Manish, his brother Laxman will pass on the funds to the legal heir of Dr Manish as per his WILL to his wife (Who has right to own). In case Dr Manish had not left any WILL, then the funds/assets will be distributed as per Indian Succession Acts.


So, Which Do I Need: A Will or a Nomination?

Now the next question arises why do I need nomination when I will only make a WILL as it super-cedes nomination. The answer is you need both Nomination and WILL for the smooth transfer of your Assets/Funds. Transferring of Funds/Assets is a 2 step process.

Step 1: Nomination ensure the smooth transfer of funds from Bank or Financial Institution to the Nominee of the deceased person’s account.

Step 2: WILL ensure the smooth transfer of funds/assets to Legal Heir as per the wish of the person.

The beneficiary in Step 1 and Step 2 can be the same or different. The current situation has exposed the uncertainty of life, therefore, utilise this lockdown time and list down your Investments, check nominations and share it with your family.

Take help of your financial coach/advisor, etc. to guide you on making your will. Nominations aligned with a legal will can save your dependents from the hassles of transfer of funds, else your legal heirs have to go through the super tedious process of providing Death Certificate, proof of relation, Probate, etc. 

So, as you’re busy helping people align their health, make sure to keep your worthy time and ensure your wealth is in alignment with your financial aspirations.

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About the author

Ms Mashru is a CHARTERED WEALTH MANAGER (CWM ) by qualification and a Financial coach by choice. She started her career in finance and later realized her passion lies in discovering peoples financial DNA. She is a founder of PLANTRICH CONSULTANCY LLP and the Co-founder and Chief Financial coach of VAMA PLANTRICH LLP. She has also been on the panel with NDTV and has been awarded an innovator in finance by international Women Leaders Forum for 3 consecutive years. She has also been a Million dollar advisor for last 6 years. She has bagged 25 more accolades in the last 10 years. She also takes lectures for various courses on personal finance and has been a guest lecturer at business management colleges. She is frequently invited to television talk shows as well. She has been certified by George Kinder on seven stages of money maturity.



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