regarding nomination


Requesting elite members to advise on following matter.
Employee nominates his father for ESI, PF, Insurance at the time of joining. Gets married thereafter but does not change nomination. He passed away due to some illness. Now spouse and his father both are asking for benefits.
My view- it is spouse who will get this. She need to provide marriage certificate or a succession certificate.
 
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The nomination is not a Will of the deceased. Nomination is in the nature of a Trust, where the nominee is appointed as Trustee to dispose of the estate of the deceased.  In the instant case, Wife has every right to contest and seek to share inthe estate of the Deceased. Further, Banks or ESI/PF authorities do not settle the amount once the matter is contested.  However, Wife has to produce proof of her being the wife of the Deceased and other documents as called for by the authorities concerned relating to Claim Settlement.

 

I repeat to reiterate that the Nominee gets no better title than the Survivors of the Deceased. He is only a Trustee in which capacity it is his/her "responsibility" to dispose of the assets equitably as per the norms applicable to the Succession Act applicable to their Religion.


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Retired employee.

The employer's duty is to settle the funds in favour of nominee only in absence of any court orders, and those legal heirs that approached may be advised either to settle with the nominee or get a stay order as expeditiously as possible against settlement in favour of the nominee.  It is not the employer's duty to seek any documents and settle the claim and it should always be through the court.

 
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Advocate

It is a moot question whether the nomination survives after the employee has married.

 
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Once a nomination is given, it does not change depending upon an event of the person giving such nomination. Marriage does not affect the nomination already given. Husband or Wife has to necessarily change the earlier nomination in favour of the spouse if they so wish. Otherwise, previous nomination stands.

 
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However, as already stated above, the nomination is not changed and the husband passed away. Wife claims the share. It is the responsibility of Nominee in the capacity of Trustee of the estate of the deceased (being the nominee) to give such share as per the law applicable to them.

 
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Advocate

I would hasten to add that the proposition as above may be appropriate in respect of a bank account, an employer can afford to take, and in my considered opinion, ought to take a more pro-active view.

The relation and interaction between a bank and its customer is more or less impersonal. Moreover, except in rare cases, the stakes involved in handing over the funds to the nominee of the customer who has passed away is not substantial.

But not so the relation between an employer and the employee. And the stakes involved are critical in as much as the benfits payble to the past employee constitute, in most cases, the only means  for the widowed lady and the  children to survive. The extant rules governing PF and pension mandate that the nominations are invalid once the employee acquires a family. And, parents could be considered to be "family" only if they are dependent on the deceased employee. Moreover, the father of the deceased employee is not among the Class I legal heirs.

As such, in my considered view, it would be poor and lazy HR policy for the employer to disburse or pass over the benefits to the nominee and advise the distraught wifeof the deceaed employee to indulge in litgation with the adament father-in-law.


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Retired employee.

@P.Venu.  Absolutely true.  But can any HR executive take an independent decision and pay the proceeds to living spouse, ignoring the legitimate claim of Nominee?  No one dares to bell the cat.   I heard other versions in several cases, that the benefits are self-acquired, and as parents supported him, and as employee's wife is an earning member, the deceased employee retained the nomination in his mother's name even after his marriage.  It depends on circumstances and now after introducing computerization in HRD records, there should be an automatic reminder after registering the marriage as to whether he prefers to change the nomination or not ?. Followed by another reminder for records.  Hope this generation of reminders may solve the issue.

 
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Normally, every spouce especially Husband changes the nomination favouring better half. In the rare event such change does not take place immediately after marriage and the husband passes away, the amount payable shall not be too big an amount. If a husband not changed nomination even after considerable service, we cannot thrust the responsibility, of altering the nomination in favour of wife violating an existing nomination favouring Parents, on HR Department which surely entangles thems into litigation from Parents. Suppose, the deceased left a proper Will, can we act as we like violating the privisions of such Will in the name of so called progressive view!? It would amount to taking the law into our hands. Lawyers should only interpret the laws, but not change the law in the process. Rules of Nomination remain same be it bank, be it employer, amount high or low. Such leverage is not given in the rules governing Nomination. In the instant case, everything depends on the family. They should work out an amicable settlement among themselves and should not go to Court in which case it would take several years to get a Judgement which again is open for appeals. Meanwhile everybody suffers for want of the amount in litigation.

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Retired employee.

There are many cases where parents borrowed huge amounts from Banks for education and for sending abroad and due to sudden demise of children, at that age they are left abandoned when the wife (newly wed) claim all such amounts including insurance etc.

 
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