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Difference Between Nominee and Legal Heir

Updated On Dec 16, 2022

Throughout life, an individual invests in various financial assets and instruments, such as fixed deposits, life insurance policies, provident funds, gold investments, and more. Similarly, Kritika, an IT professional, had invested money in several fixed deposits during her lifetime. In Delhi, she was living a happily married life with her husband and two children. One day, she met with an accident while travelling to an office, resulting in her death. Before her death, Kritika asked her lawyers to draft a will mentioning her younger son as a legal heir for all my investments. However, her older son was appointed as a nominee for all the fixed deposits. Over the course of time, the situation turned into a dispute between her children regarding who was eligible to benefit from the investments. 

Difference Between Nominee and Legal Heir

After reading the above story of Kritika, you must have the following questions in your mind: “What is the meaning of a nominee and a legal heir?” and "How is a nominee different from a legal heir?” And, “What happens if no instructions are left behind by the descendent?” Don’t worry, in this article, we’ve given a solution to all your questions. Continue reading to find out more! 

Who is Nominee? 

A nominee is a person who is chosen by another person to work as their representative and is eligible to get the assets or amount after the demise of that person. A nominee does not have any right to the wealth of the deceased person. In accordance with the deceased's last will and testament, he transfers all money and property to the designated legal heir.  

You can only appoint a nominee from your family. Any nomination that gives preference to someone other than family members is deemed invalid. However, if a person doesn’t have a family, they are free to nominate anyone. The nomination becomes invalid when the nominated person acquires the family, and therefore, a new nominee is appointed. 

Who is Legal Heir? 

The term "legal heir" designates a person who is entitled to and has the right to receive the deceased person's assets and property in accordance with a signed legal will. The deceased individual will name the legal heir as the important inheritor. Legal heirs can be one, or even several, individuals. 

Comparison Between Nominee and Legal Heir

Listed below are some parameters that distinguish the nominee from the legal heir.

  • A nominee is a person who has been authorized by another person to receive the money upon the demise of that person. Whereas the legal heir is the one who receives ownership of the wealth and property of a deceased person. 
  • A nominee is similar to agent who is responsible to look after the property of another person until it can be transferred to its legal heirs. However, a legal heir owns a share of the deceased person’s property and serves as a beneficiary. 
  • After the person who made the nomination passes away, a nominee is permitted to receive the money, but the legal heir is the only one who is entitled to the deceased person’s wealth, possessions, and investments. 
  • The legal nominee is chosen through nomination, whereas the legal heir is chosen through a person’s will. And the provisions of succession law shall apply if there is no alternative. 

What Happens if There is No Appointed Nominee or Legal Heir? 

In case the deceased person hasn’t left behind any instructions regarding what should be done with fixed deposits in case of their death, the following are two actions that banks may take: 

  • Connect with any close relative of the deceased deposit holder. 
  • Until someone claims the money, the bank may reinvest the fixed deposit and continue the investment. Over a period of time, any person claiming the amount must have to prove their relationship with the deceased depositor. 


So, as you know the difference between the nominee and the legal heir, the clash between the children of Kritika can easily be resolved. She has appointed her older son as the nominee, who will take care of all his wealth and assets until her younger son becomes the rightful heir to all her property.

Also Read: Features of guaranteed return plans


This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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