—Herman Patel

We are commenting only on the nominations made under a life insurance policy. The Insurance Laws (Amendment) Act, 2015, states that if a person nominates their parents, or spouse, or children, or any of them, such nominees shall also beneficially be entitled to the amount payable by the insurer to the deceased policyholder, and shall not merely be custodians. They will obtain the proceeds of your insurance policies outright. Thus, in your case, if the nominees to your policy are your parents, spouse or children, they would be entitled to receive the insurance proceeds beneficially.

However, if your new or additional nominees are outside the scope of the immediate family members (say, your cousin or your best friend), they would receive the proceeds of your insurance policies in their capacity as custodians of the proceeds, and would need to then transfer the same to the persons named as heirs in your Will (if they are not the same persons). This is because nominations are made with a view to ensure that the estate or any other subject matter is protected till the legal heirs (who may or may not be family members) of the deceased take appropriate steps. Hence, the nominee would merely be entitled to hold such assets on behalf of the legal heirs, until the legal heirs take the required steps under the applicable law. Also, note that this would depend entirely on whom you have named as the nominees to your life insurance policies.

We recommend that you specifically mention the names of both the nominees and the legal heirs to whom you wish to bequeath the proceeds of the insurance policies when making your Will. If more than one legal heir is identified for each of the said policies, it is recommended to include the exact proportion of the entitlement of the proceeds of the insurance policy.

I am planning to make a Will. Is it necessary to mention the executor of my Will? Can anyone be an executor or will I have to appoint a lawyer?

—Krishna Mehra

While the Indian Succession Act does not make it compulsory to appoint an executor of a Will, this is one of the most important decisions of a testator—an executor is absolutely critical and should always be clearly appointed. The executor is the one who gives effect to your Will after you die, and depending on how your Will is structured, she may have wide discretion to distribute certain assets. The executor is responsible for taking your Will through the probate process (if so applicable) and ensuring that your estate is distributed exactly as per your Will. A wrong choice here is likely to stall the distribution of your estate, and lead to problems for your heirs.

Anyone can be the executor of your Will. It is not necessary to appoint a lawyer. In most cases, we see the surviving spouse being named as the executor, followed by the eldest child (usually the son) as the second executor. The child steps in if both the parents pass away together. Additionally, if you have a trusted friend or other relative, they can be considered. If you do not wish to include any relative or friend as the executor, you should consider a professional executor or a lawyer. They usually do so for a fee and a clear indemnity. This is a safer approach as it avoids the risk of any conflicts. You can appoint more than one executor as well to ensure that the responsibility is shared suitably. Please speak to your lawyer to understand how to structure and layer the executor powers between multiple executors.