Nomination for bank deposit who is not beneficiary?
Querist :
Anonymous
(Querist) 29 May 2010
This query is : Resolved
For Bank Fixed Deposit My father in law wants to nominate my wife who is her daughter and than after his death he his asking my wife to give that money to his son who is American citizen, Is there any tax complication or is there any other way
How do we transfer money to america
My father in law is not making her beneificiary , but using her name to transfer money to his son
what is risk involved ?
A V Vishal
(Expert) 29 May 2010
Is there any tax complication or is there any other way
Ans. There is no complication, your wife is merely a trustee to her father's property, which she has to hand over to her brother upon your father in law's death.
How do we transfer money to america
Ans. Through wire transfer or any other mode of banking.
My father in law is not making her beneificiary , but using her name to transfer money to his son
what is risk involved ?
Ans. There is no risk involved and it is absolutely safe way of doing it.
Vineet
(Expert) 29 May 2010
A nominee is merely a trustee of the underlying asset and the property passes to successors as per provisions of relevant inheritance laws or will.
In your case, your wife will merely be trustee of the deposit funds and she is under legal obligation to disburse the funds of deceased to its rightful owners. If your father in law is not excluding her from the said funds by way of a will (in other words declaring his son as the only successor), then she is also entitled to receive her share in fathers assets including the said deposit funds.
There is no tax implication in the matter and neither any legal complication. The will or succession certificate of father needs to be probated by a competent court after his death and funds can be remitted to overseas successor through regular banking chanels.
N.K.Assumi
(Expert) 29 May 2010
The Banking Laws (Amndment ) Act, 1983: Section 45ZA* (1)Nomination for payment of depositor's money:- Where a depoit is held by a banking company to the credit of one or more persons, the depositor or,as the case may be, all the depositors together, may nominate, in a prescribed manner, one or more person to whom in the event of the death of the sole depositor or the death of all the depositors, the amount of deposit may be returned by the banking company.
(2) Notwithstanding anything contained in any other law for the time being in force or in any deposition, whether testamentary or otherwise, in respect of such deposit, where a nomination mase in prescribed manner purports to confer on any person the right to receive the amount of deposit from the banking company, the nominee shall, on the death of the sole depositor or, as the case may be, on the death of all the depositors, become entitled to all the rights of the sole depositor or, as the case may be, of the depositors, in relation to such deposit to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner.
(3) Where the nominee is a minor, it shal be lawful for the depositor making the nomination to appoint in the prescribed manner any person to receive the amount deposit in the event of the death during the minority of the nominee.
(4) Payment by banking company in accordance with the provisions of this section shall constitute a full discharge to the banking company of its liability in respect of the deposit.
Provided that nothing contained in this sub-section shall affect the right or claim which any person may have against the person to whom any payment is made under this section.
