You are using an older browser version. Please use a supported version for the best MSN experience.

The nominee is a trustee, not an owner. Assets always belong to the legal heirs

LiveMint logoLiveMint 27-06-2017 Surya Bhatia

My parents expired without leaving a legal Will. In my mother’s demat account, I am the nominee. In such a case, who will get ownership of her shares? Will it be just me or all the legal heirs?

—Amit Bhatia

A nominee is a trustee of assets and not the owner of the assets. A nominee gets the transfer of asset in her name but is bound to transfer the assets in favour of the legal heirs. In case there is a Will made by the owner of the assets, then irrespective of what the nomination is, the legal heirs as per the Will are entitled to the assets. But what happens if there is no Will? The legal heirs have to apply for a succession certificate to prove that they are the ones who are the legal heirs and the rightful owners of the assets.

At the same time, if there is a nomination in the case of shares held in the demat account, provisions of the companies Act would be applicable, wherein the nominee is given a right to ownership if nomination is done.

I want to purchase a resale flat in Kolkata. Can I withdraw 90% of my EPF money for this? My service tenure is more than 10 years.

—Siddhartha Sadhu

While the Employees’ Provident Fund (EPF) is generally talked about as an investment vehicle to create a retirement corpus, there are many reasons that make an employee dip into his EPF corpus. And yes, there are specific reasons against which only you can partially redeem the EPF. The list is exhaustive and includes education /marriage of self or children, medical treatment for self, spouse, children and parents, purchase or construction of plot, purchase of an apartment or house including alteration or renovation, repayment of housing loan.

In your case, as you want to purchase a flat the minimum requirement is to have completed 5 years of service which you have completed. Further, there is a condition that the flat to be purchased should be registered in your name or in the name of your spouse and can also be held jointly with spouse. In addition to that there is a cap on your withdrawal i.e. 36 times of your monthly salary can be withdrawn. And this facility can be used only once during your tenure of service. And as per the new provision, wherein the employee can withdraw ninety percent of the entire PF balance including interest, EPFO subscribers have to form a cooperative society with at least 10 members having EPF to avail of this facility.

I plan to invest in a few IPOs, and have also started the procedure to open a demat account. As I am an NRI, I have both NRE and NRO accounts. The form which is to be submitted to the broker requires me to state from which account I would want to do the trading from. Kindly suggest which account I should provide (NRO or NRE) for this purpose?

—Harish Sivaraman

As a non-resident Indian (NRI) you need to decide which bank account you are more comfortable with. You can use either the non-resident external (NRE) or the non-resident ordinary (NRO) account.

The decision will also depend on the balances you maintain in each of the accounts and the frequency of transaction. So, if you will be an active trader and also want to buy stocks regularly, you may prefer to use the account where you receive regular credits. This could be your NRO account, as for an NRE account, your source of credit will typically be from overseas. Also, the ease of operation and convenience and which account you can handle better have to be considered.

Surya Bhatia is managing partner at Asset Managers.

Queries and views at mintmoney@livemint.com

More From LiveMint

image beaconimage beaconimage beacon