A SMALL ACT WITH A BIG IMPACT: WHY NOMINATION IS KEY

A well-settled professional in his early forties—fit, forward-looking, and financially aware—died suddenly of cardiac arrest a few years ago.

- Nayana Ovalekar, chief regulatory officer, Central Depository Services Ltd (CDSL).

Despite his disciplined investments in shares and mutual funds, his family struggled through paperwork and legal formalities because he hadn't nominated anyone for his demat account.

Such cases are common. Life is uncertain, and while many plan carefully for their family’s future, they often miss this simple but crucial step. According to Sebi’s 2024-25 annual report, mutual funds have ₹1,128 crore in unclaimed redemptions and ₹2,324 crore in unclaimed dividends. Much of this remains untouched because heirs find it hard to prove ownership. A nomination helps avoid this. It allows you to name a person who can claim your securities in the event of your death—ensuring your assets reach your loved ones without legal complications.

Nominee versus heir

However, it is important to understand that nomination is not the same as declaring a legal heir. The nominee acts as a trustee of the assets of deceased demat account holder(s) on behalf of legal heir(s). The ultimate ownership of the securities will be determined based on your will or the applicable succession laws.