Why the secrecy around nomination?
Many investments do not reflect the name of the nominee on the document. Imagine the many situations that this can give rise to, none of them joyful
We have got to a point where we have so many passwords that we can’t remember them. We need password managers or at least, a little black book with passwords! Google, meanwhile, is forcemoving us to a passkey regime involving fingerprint and face recognition promising to end memory and riskrelated ills.
Gone are the days when the daughterinlaw of the family, after an exacting probation period no doubt, was given the key bunch signifying that she is the trustee of family jewels and finances!
Today, we leave behind assets through various legal means like wills, settlement deeds, nominations and such. Many don’t get organised enough to do it or die an untimely death, leaving family members grappling with the issue and, frequently, with each other.
This need not be so as such decisions can be recorded on the go as and when investments are made.
Even as there are moves to make us aware of nominations, there are equivocal initiatives from authorities and we saw some of that in the previous instalments of CoverNote. This time around let us look at another dimension of the initiative that negates the intention.
Issues with nomination
Almost all financial investments can be nominated and the nomination registered. Some, and this is puzzling, don’t give you an acknowledgment or reference number for the nomination. Moreover, on the face of the instrument, say a passbook or bond, they may state whether a nomination has been made or not. Some even give a registration reference number.
Only some mention the name of the nominee.
There is logic in this because once printed, it reflects a validity, albeit of the status on that day. The point being a nomination can be changed, multiple times even.
Ascertaining nominee
Yet, imagine the runaround to ascertain the nominee of various investments after somebody has passed away.
Why can’t the family member who is not nominated but is in possession of the instrument/ information simply suppress it so that, never mind that he isn’t going to get the money, he can prevent someone else from getting it!
Some centralisation of such a record would be great. While we wait for simplification and standardisation to solve this pain point, guess we have to maintain a meticulously updated notebook listing investments/ assets and to whom each is nominated. Very retro! But if it works, it works!
(The writer is a business journalist specialising in insurance & corporate history)