Financial decisions shouldn’t be an act of ignorance or laziness. As much as we would like to believe that wealth planning is a result of intense research, it’s simply a copy-paste of what is popular in the society. However, as far as money matters are concern, you can’t afford this behaviour for long. A popular example of financial laziness is this – Before making any investment, we usually think only about the return and often tend to miss out adding a nominee.
Many investors procrastinate this task thinking it is just another formality. Reminding us the importance of nomination in investments, Radhika Gupta, MD and CEO at Edelweiss Mutual Fund sent out an underrated advice on social media.
Gupta wrote on Twitter, “Underrated: having nominees on your investments. This 1 minute activity that can be done today saves week and months of heartache for someone years later.”
Underrated: having nominees on your investments
This 1 minute activity that can be done today saves week and months of heartache for someone years later.
— Radhika Gupta (@iRadhikaGupta) September 10, 2021
Nomination enables the asset holder to nominate (propose or formally enter as a candidate) an individual to claim the proceeds upon his/her death. Its the right conferred upon the holder of a bank account to appoint one or more people who will eventually be entitled to receive money upon the death of the account holder.
A nominee can be anyone from your family members, including parents, spouse or siblings in certain cases. In the case of death of an account or investment holder, the financial institution can release the account proceeds or contents to the nominee without insisting upon a succession certificate, letter of administration or court order.
The whole effort of investing for your dependents and securing their future financially would be pointless if they are not able to get the benefits. Hence nomination is as crucial as investing itself.
In conversation with Money9, Deepak Jain, head of sales at Edelweiss Asset Management Company reiterated the importance of nomination for mutual fund investors.
“Many investors have suffered the consequences of not filing a nomination, we have observed in the last 18 months. This is a very small, yet important exercise for investors,” Jain pointed.
Make sure to protect your investments end-to-end by mentioning a nominee to each one of them. The unpredictability of life should never come in the way of your finances. Stay aware and spread awareness.
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