Nominee vs Legal Heir vs Succession Certificate (India 2026)

Nominee vs Legal Heir vs Succession Certificate: What You Need to Claim a Deceased Person’s Money (2026)

October 28, 2026

When someone dies, the family usually finds out three things in the first month. The bank wants a document nobody has heard of. The person named as “nominee” is not sure if the money is theirs. And everyone asks whether they need a legal heir certificate, a succession certificate, or both. The answer depends on where the money sits, so this guide goes asset by asset: bank deposits, shares, and insurance.

The short answer

A nominee is the person the bank, broker or insurer can safely pay. For bank deposits and shares, the nominee receives the money as a trustee for the legal heirs. It is not automatically theirs to keep.
Legal heirs are the people the law says inherit, or the people named in a valid will. They are the ones who finally own the money.
A succession certificate is a court order that says who may collect a dead person’s debts and securities, such as bank balances and shares. You need it mainly when there is no nominee and the amount is large, or when family members dispute the claim.
If a nominee exists, the bank should not ask for a succession certificate, whatever the amount, under RBI’s 2025 rules.

The three terms in plain words

Term	What it is	Who issues or decides it
Nominee	The person you name on an account, demat account or policy to receive the money after your death. Mostly a receiver, not an owner.	You, while alive, by filling a nomination form
Legal heir	A person who inherits by law (if there is no will) or by the will. A legal heir certificate is a document recording who the heirs are.	Usually a revenue authority such as the tehsildar. The process differs from state to state.
Succession certificate	A court order allowing a person to collect the deceased’s debts and securities.	The District Judge of the area where the deceased ordinarily lived

Bank deposits: how it works now

RBI issued new directions on settling claims of deceased customers on 26 September 2025. Banks had to apply them by 31 March 2026, so they are now in force. Three points matter most for a family.

With a nominee or survivor: the bank should not ask for a succession certificate, letter of administration, probate, or an indemnity or surety bond, whatever the amount. It can ask for the claim form, the death certificate and the nominee’s ID. The nominee receives the money as a trustee for the legal heirs.
With no nominee: a simplified route applies up to ₹15 lakh at most banks and up to ₹5 lakh at co-operative banks (a bank may set a higher limit). It applies only if there is no will, no dispute and no court order. The bank typically asks for a claim form, death certificate, your ID, a bond of indemnity, a disclaimer from heirs who are not claiming, and either a legal heir certificate or a declaration from an independent person. Above that limit, expect to need a succession certificate, a legal heir certificate or a sworn affidavit, and the bank may ask for a surety.
Time limit: a bank should settle a deposit claim within 15 calendar days of receiving all documents. If the delay is the bank’s fault, it owes interest at the Bank Rate plus 4% a year for the delay.

Joint accounts: in a joint account the nominee’s right begins only after all the account holders have died. While one holder is alive, the survivor operates the account as the mandate says.

Four nominees: from 1 November 2025 the Banking Laws (Amendment) Act 2025 lets you name up to four nominees on a deposit account or locker. You can split the share between them (the shares must add up to 100%), or name them in order so that the next one steps in if the first cannot claim. If you have one nominee on an old account, it is worth changing the form.

Shares and demat accounts: the new SEBI rules

SEBI circulated a simplified, standard framework for transmission of securities on 23 July 2026. It applies 30 days after the circular, so from about 22 August 2026. A nominee again receives the securities as a trustee for the legal heirs, and the company or depository is discharged once it transfers them. Where there is no nominee, the paperwork depends on the value.

Value of holding	Demat	Physical shares	What the legal heir provides
Very small (fast track)	Up to ₹30,000	Up to ₹10,000	A plain-paper request-cum-undertaking and proof of relationship. Only for immediate relatives: parents, spouse, children, parents-in-law.
Simplified	Up to ₹30 lakh	Up to ₹10 lakh (the company may raise it)	A notarised indemnity bond, plus a notarised affidavit-cum-NOC from all legal heirs, or a family settlement deed
Above that	Above ₹30 lakh	Above ₹10 lakh	The affidavit-cum-NOC, plus one of: a copy of the will with a notarised indemnity bond, a legal heirship certificate from a revenue officer of at least tehsildar rank with an indemnity bond, or a succession certificate, letter of administration or court decree

The entity should process a complete claim within 21 calendar days and give written reasons for any delay or rejection. In practice, this means most families with a demat account under ₹30 lakh can avoid a court. Ask your broker or depository participant for the current forms, since each follows the same framework but has its own paperwork.

Life insurance: the grey area

Insurance is where “the nominee gets everything” is least certain. Since the 2015 change to Section 39 of the Insurance Act, a policyholder’s spouse, children or parents named as nominees are treated as “beneficial nominees”, which is meant to let them keep the proceeds. The insurer is safe once it pays the nominee, and in practice it pays. But High Courts have reached different views on whether a beneficial nominee keeps the money against the other legal heirs. One High Court ruled for the nominee in 2023. The Allahabad High Court held in 2025 that other heirs’ rights are not wiped out and that ownership must be decided on the facts. I could not find a Supreme Court ruling on the amended section.

The sensible reading is to treat the nomination as “who the insurer will pay”, and to make your actual wishes clear in a will. If you want one person to get the policy money, say so in the will as well.

When you actually need a succession certificate

Part X of the Indian Succession Act, 1925 covers succession certificates. A certificate can be granted for debts and securities, which include bank balances and shares. The application goes to the District Judge of the area where the deceased ordinarily lived (Section 371), who decides after a hearing and notices. You will usually need it when:

there is no nominee and the amount is above the bank’s or SEBI’s simplified limit;
the heirs disagree, or someone has gone to court about the estate;
an institution asks for it anyway, for example for a provident fund or another scheme with its own rules.

Court fees, documents and the time it takes vary by state and court, so ask a local lawyer for the figures instead of relying on a generic number. This guide is about money in banks, demat accounts and policies. Transferring land or a house into heirs’ names goes through separate local records and is not covered here.

Which document do you need? Common situations

Situation	What to expect
Bank savings or FD, nominee exists	Claim form, death certificate, nominee ID. No succession certificate. The nominee holds the money for the heirs.
Bank account, no nominee, ₹10 lakh balance, no will, family agrees	Simplified route: indemnity bond, disclaimers from other heirs, legal heir certificate or an independent declaration
Bank account, no nominee, balance above the bank’s limit	Succession certificate, legal heir certificate or sworn affidavit, and possibly a surety
Demat account under ₹30 lakh, no nominee	Indemnity bond with an affidavit-cum-NOC from all heirs or a family settlement deed. No court order.
Demat account above ₹30 lakh, no nominee	Affidavit-cum-NOC plus a will, legal heirship certificate or succession certificate, as listed in the table above
Heirs disagree	Expect a court order. Banks and registrars will not release money against a dispute.

What to do while you are alive

Add a nominee to every account, demat account, policy and locker. Most of the delays above come from accounts with no nominee.
Use the four-nominee option on bank accounts if you want the money to reach more than one person.
Write a will. A nomination only decides who is paid. A will decides who the money finally belongs to. Our guide on how to make a will in India covers the format, witnesses and registration.
Consider a trust for larger estates. It is not for everyone, and our guide to a family trust in India explains when it helps and when it doesn’t.
Keep a simple list of banks, brokers, policies, lockers and where the papers are, and tell one family member where it is. If money does get forgotten, see what happens to unclaimed funds in India.

Before you rely on this

Rules differ by institution, state and the facts of the case. This is general information, not legal advice, and a lawyer should check a large or disputed estate.
Government schemes such as PPF and SCSS, and provident funds, follow their own claim rules, which are not covered by the RBI directions above.
The SEBI framework applies from about 22 August 2026. Brokers and depositories may take time to update their forms, so ask for the current version.
The legal position of an insurance nominee is still unsettled, as explained above.

Sources: RBI (Settlement of Claims in respect of Deceased Customers of Banks) Directions, 2025; SEBI circular of 23 July 2026 on transmission of securities; Banking Laws (Amendment) Act 2025 nomination provisions; Indian Succession Act, 1925, Part X. Verified October 2026.