Nomination and transmission
The answer
A nomination tells your depository who may claim the securities in your account after you die. It is not a will and the nominee is not automatically the owner. Without one, your family has to prove their entitlement through succession documents, and that takes months.
Why this costs you money
This is the only article in this cluster where the cost is not paid by you. It is paid by the people you leave behind.
Here is the shape of it. A person dies holding shares in a demat account with no nominee registered. The family knows the account exists. They cannot touch it. To claim the securities they must produce proof of entitlement — and with no nominee and no simplified route available, that can mean a succession certificate or a probate of the will from a court.
That process takes months. In many Indian cities it takes over a year. It costs court fees calculated on the value of the estate. During all of it, the shares sit in a dead person's account. They cannot be sold when the market falls. They cannot be sold when the family needs the money. Dividends accumulate and cannot be withdrawn.
With a nominee registered, the same family submits a transmission request form, a death certificate and the nominee's own account details. It is measured in weeks.
The whole difference is a 2-minute form that most readers have never filled in.
There is a second version of the cost, and it is subtler. Some people register a nominee and then believe they have written a will. They have not. What that misunderstanding does to a family is worse than having no nominee at all, because everybody thought the matter was settled.
How it works
Three words get used interchangeably and they mean 3 different things.
| Word | What it means |
|---|---|
| Nominee | The person the depository may release the securities to. A receiver, and in India generally a trustee for the legal heirs |
| Legal heir | The person entitled to the property under a will or under succession law |
| Transmission | The process by which securities move from a dead holder to whoever is entitled |
A nominee is a discharge mechanism. Registering a nominee tells the depository who it can safely hand the securities to. That protects the depository and it speeds up the family. It does not decide who finally owns them. If the will says the shares go to a daughter and the nominee is a brother, the brother receives them and holds them for the daughter.
This is not a technicality. The Supreme Court of India settled it in December 2023 in Shakti Yezdani v Jayanand Jayant Salgaonkar, holding that nomination under the Companies Act does not override succession law and does not create a third mode of succession.
Transmission is different from transfer. A transfer is a voluntary movement of shares between 2 living people. A transmission happens by operation of law, after death or under a court order. Different forms, different documents, different tax treatment.
Joint holding is a separate mechanism. For a jointly held account, the securities pass to the surviving holder, and the nominee only matters after the last holder dies. Joint holding and nomination solve different parts of the same problem.
What it tells you, and what it does not
A registered nomination tells you the account will not be stuck. That is the whole benefit and it is a large one.
It does not tell you the estate is arranged. It does not distribute your assets according to your wishes. It does not cover a bank account, a property, a provident fund, or an insurance policy — each of those has its own nomination and its own rules.
And it does not remove the need for a will. In India, a will is what decides who owns the assets. The nomination decides who receives them first. A person with a demat account, a house and 2 children needs both, and the 2 documents must say things that agree with each other.
The decision rule
Do this in the following order, and stop when you have done all 3.
- Register a nominee on every demat account you hold. Today, from the
app.
- Make the nomination consistent with your will. If they disagree, the
family gets a dispute exactly when they are least able to handle one.
- Tell somebody the accounts exist. An unfound account is worse than an
unclaimed one. A single written list of institutions, with no passwords on it, is enough.
If you have a will and no nominee, the family will get there slowly. If you have a nominee and no will, they will get there quickly and may then argue. Do both.
Try this now
Sixty seconds. If you do only 1 thing in this entire cluster, do this one.
- Open your broker app. Go to Profile, Account, or My Profile.
- Look for Nominee, Nomination or Nomination details.
- Read what is there. Not what you remember doing. What the screen says.
- If it says no nominee is registered, or shows an opt-out declaration you do not remember making, add a nominee now. In India the form needs the nominee's name, their relationship to you, and their date of birth if they are a minor. It is completed online with an electronic signature or a one-time password.
- Repeat for every demat account, every mutual fund folio held outside demat, and — in the United States — check whether your brokerage account has a Transfer on Death registration or a named beneficiary.
What you should see. Most readers will find no nominee registered. That is the expected result, and it is why this article exists. Investors who opened accounts before nomination was pushed hard, and investors whose accounts were opened for them by somebody else, are the 2 groups most likely to find the field empty.
The second common finding is a nominee registered years ago who is no longer the person you would choose — a parent who has since died, or a spouse from a marriage that has ended. A nomination does not expire and nobody reminds you.
If you have more than 1 account, expect them to disagree with each other. Fix them all in the same sitting.
Three real cases
1. Shakti Yezdani v Jayanand Jayant Salgaonkar, Supreme Court of India, 14 December 2023 — a nominee is not an owner The Supreme Court held that nomination under the Companies Act does not confer ownership, and that the nominee holds for the legal heirs under succession law. It set aside a contrary line of reasoning from an earlier Bombay High Court decision. Families had been litigating this question for years on the belief that the nomination decided ownership. It does not.
2. SEBI's nomination framework, effective 1 September 2026 (India) — the rule moved, twice SEBI made nomination or a formal opt-out compulsory for new single-holder demat accounts and mutual fund folios from 1 September 2026, with a simplified form and multiple nominees permitted. An earlier proposal to freeze existing accounts without a nominee was dropped in 2024. The practical lesson is that the absence of a freeze removed the pressure, and the accounts that most need a nominee are exactly the old ones nobody is being forced to fix.
3. Unclaimed assets in India — the size of the problem Large sums sit in unclaimed shares, unpaid dividends and inactive folios in India, transferred over time to the Investor Education and Protection Fund when they remain unclaimed for the statutory period. Recovering money from that fund requires a formal claim process running through the company, its registrar and the fund authority. Every rupee in there belonged to somebody whose family either did not know about it or could not prove entitlement.
The question that resolves it
A novice asks: who gets my shares?
An expert asks: who can the depository legally hand them to on the day, and does that person agree with my will?
Those are 2 different questions and they need 2 different documents. Answering only the first is where most people stop.
What would make this wrong
If nomination made no difference, then families with a nominee and families without would take the same time to claim securities. They do not. The documentation lists are different and publicly published by the depositories, and the difference is a death certificate against a court process.
Two honest limits.
Nomination is not estate planning. For anybody with meaningful assets, multiple heirs, or property in more than 1 country, this article is the floor and not the ceiling. Get advice.
And in the United States the mechanism described below is a genuine transfer of ownership, not a receiver arrangement, which means the trade-offs are different and a Transfer on Death registration that contradicts your will causes a different kind of problem.
In India
Nomination for demat accounts is governed by SEBI and the depositories.
- You may register more than 1 nominee, with a percentage share for each. Without percentages, the holdings are divided equally.
- From 1 September 2026, a person opening a new single-holder demat account or mutual fund folio must either nominate or file an opt-out declaration.
- Existing accounts are not frozen for having no nominee. Depository participants must send reminders.
- A nominee can be changed or cancelled at any time, free of charge.
Transmission with a nominee. The nominee submits a transmission request form, a certified copy of the death certificate, and the client master list of their own demat account. No succession certificate or probate is required.
Transmission without a nominee, single holder. The claimant needs a notarised death certificate plus a succession certificate, a probate of the will, or letters of administration — unless the value falls under the simplified threshold. Under the simplified route, a set of documents including an affidavit, an indemnity and no-objection certificates from the other legal heirs is accepted instead. The threshold has been raised more than once and further increases have been proposed.
Tax. India has no inheritance tax. Securities received on transmission are not taxed at that point. When the heir eventually sells, the original holder's cost and holding period generally carry over.
In the United States
The equivalent mechanism is Transfer on Death registration, also called a beneficiary designation on a brokerage account. Most states have adopted the Uniform Transfer on Death Security Registration Act.
It works differently from an Indian nomination in 1 important way. A TOD beneficiary becomes the owner. The account passes outside probate, directly, on production of a death certificate. There is no trustee relationship and no argument about who the real heir is.
That makes it powerful and it makes it dangerous. A TOD designation generally overrides what your will says about that account. A will that leaves everything equally to 3 children, plus a brokerage account with a TOD naming only 1 of them, will produce exactly the outcome you would expect and did not intend.
Two more points.
Retirement accounts such as an IRA or a 401(k) have their own beneficiary designations, with their own tax consequences for the beneficiary. They are not covered by a TOD form on a taxable account.
The cost basis usually steps up. For most inherited securities, the beneficiary's cost basis is reset to the value at the date of death, so the gain accumulated during the original owner's lifetime is not taxed on a later sale.
Where they differ, and what that tells you
An Indian nominee receives. A US TOD beneficiary owns.
That single difference changes what each document can do to you.
In India the danger is inaction. Because the nominee is only a receiver, naming one costs you almost nothing and cannot override your will. There is no good reason not to do it, and the only real failure mode is not doing it at all.
In the United States the danger is a contradiction. Because a TOD beneficiary takes ownership outright, the form has to match the will, and the will does not control it. A US reader should check every account's beneficiary designation against their will, and treat a mismatch as an active problem.
The instruction that works in both countries is the same 2-part one. Register the beneficiary or nominee on every account. Then read your will and check that the 2 documents describe the same outcome. In India the second step is a check. In the United States it is the whole point.
Carry this
- Check the nomination on every demat account today. Most readers have none.
- In India a nominee receives, and the will decides who owns.
- In the United States a beneficiary designation owns, and it beats the will.