The Fate of Your Demat and Trading Accounts When No Will Is Made

Planning your estate often includes property, bank accounts, and life insurance, but stock market investments like demat and trading accounts are frequently overlooked. Without a will, your shares and securities don’t disappear, but your heirs may face paperwork, disputes, and delays in claiming them.

The Role of Nomination

Every demat account holder can add a nominee. This person can access the shares directly after the account holder’s death. The nominee essentially acts as a custodian, ensuring that the assets are eventually passed to the rightful heirs. 

When the nominee aligns with the instructions in your will, the transfer process is smooth. However, without a will, even a nominee’s rights can be challenged by other legal heirs, which may lead to delays or disputes over the inheritance.

No Nominee, More Complications

If you never added a nominee, your family will need to obtain a succession certificate or legal heir certificate. This involves going through the court system, which adds time, cost, and stress to the transfer process. 

Even a small holding of shares requires the same formalities. Regulators such as SEBI and depositories repeatedly advise investors to fill in nominee details to avoid these complications.

Impact of Dying Without a Will

In the absence of a will, your demat account falls under the applicable succession laws. For example, under the Hindu Succession Act, shares are divided among legal heirs such as a spouse and children. For other communities, personal laws determine the inheritance. While the shares will eventually reach the heirs, the process can be lengthy, and the nominee may only act as a temporary holder until legal procedures are completed.

Why Making a Will Matters?

Even if a nominee is in place, a will ensures clarity and prevents conflicts. It specifies who receives your shares and in what proportion, avoiding confusion between nominee rights and legal heir claims. 

This is particularly important today, when individuals often hold multiple demat accounts, mutual fund SIPs, and other investment instruments. A clear will simplifies the transfer process and protects your family from unnecessary delays and legal hurdles.

Read More:PFRDA plans NPS revamp with gold, silver and AIFs

Conclusion

Demat and trading accounts are a crucial part of modern investment portfolios, and their proper succession requires attention. Nomination helps, but a will provides the clearest path for transferring assets to your heirs. Ensuring both are in place secures your investments and gives peace of mind to your family.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.