Transferring Bank Accounts of Deceased to Legal Heirs in India
After losing loved ones, family members living in India as well as abroad face the daunting task of transferring the assets of the deceased to rightful owners and legal heirs. As assets cannot remain in the name of deceased, the same must be transferred at the earliest for smooth transition.
When it comes to assets in any bank in the Republic of India, all banks follow the guidelines provided by Reserve Bank of India. The claimants are required to inform all banks of the deceased about the death of the account holder.
What are the documents that need to be submitted to recover assets of the deceased and by whom?
The inquiry begins: ask whether the deceased, in his/her single account/fixed deposit/safe deposit box (Lockers), registered any nominees? If yes, only the nominee has a right to file a claim with the bank for recovery of assets of the deceased. He/she submits copy of death certificate, verifies his/her identity, and nomination. The bank will transfer the entire balance in the deceased’s account to the nominee, who will distribute the same to legal heirs of the deceased. There is no need for obtaining Court documents, i.e., Grant of Probate, Letter of Administration, or Succession Certificate.
In the case of a Joint Account/Joint fixed deposits/joint safe deposit box (Lockers), the bank will look into who was chosen by the deceased and other Joint Account holders to operate the account after death of one of Joint Account holders. If all Joint Account Holders registered a surviving clause in the Joint assets, i.e., ‘Either or Survivor’, ‘anyone or survivor’, ‘former or survivor’ or ‘latter or survivor’, the surviving bank account holder will operate the account, claim assets of the deceased, and transfer the same to legal heirs in accordance with law.
If there is no survivorship clause, ask whether the account holder appointed anyone as a nominee? If there is no nominee and no survivorship clause, only then other legal heirs could claim assets.
It is important to understand that “Nominee” and “Survivor” of Joint Account Holder, are just trustees or fiduciaries of legal heirs of the deceased.
They are not owners of the assets of the deceased. Their responsibility is limited to collecting the assets and distributing the same to legal heirs. They must protect and preserve the estate till distribution is complete.
In case, there is no nominee or survivor recorded in the bank account by the deceased, the bank will require production of necessary documentation from the claimant. If balance in the account is small (below minimum account balance threshold), the banks will release money to any legal heir on production of death certificate and a letter of indemnity. Otherwise, the banks will ask heirs to produce court documents, such as Grant of Probate, Letter of Administration, or a succession certificate, etc.
Hence, it is important for all bank account holders to ensure that nominee/survivor is registered.
At the same time, nominee as well as survivor of Joint Account (with survivorship clause) must understand that their right is limited to collecting assets of the deceased on behalf of legal heirs and distribute the same to legal heirs in accordance with law. He/she is stepping into the shoe of the deceased. Breach of this fiduciary duty by nominee/survivor is a crime punishable by law.
Author: Santosh Kalra Pawar is a practicing attorney in the State of New York, specializing in U.S. Immigration, NRI Legal Consulting Services, Family Law and Wills. She is a law graduate of University of Delhi, India, and has attended Syracuse Law School. She practiced as an attorney in India from 1984 to 1989, and has been a practicing attorney in the State of New York since 1993. For more information, evaluation of your case, and legal assistance, please feel free to contact at Santosh@attorneypawar.com
