In the wake of a recent SEBI circular, the spotlight has once again turned to the importance of having a well-prepared Will, especially amidst the growing concern over unclaimed assets.
The SEBI has updated rules to make it easier for heirs to claim securities (like stocks and bonds) when the original owner passes away. This includes both digital (dematerialised) and physical (non-materialised) forms of securities. The goal is to decrease the number of unclaimed assets and streamline the process of transferring these assets to the rightful heirs.
The changes focus on ensuring that nominations are properly made and recorded, making the transfer of assets smoother and more efficient after the owner's death. This approach is designed to safeguard investors’ interests and bolster financial security.
Per the below excerpt however,the circular once again reiterated that the reform to the nominations process does not replace the need for a Will. The said reform does not circumvent the succession laws that are currently in effect - which is why this is a pivotal reminder to everyone of the power and necessity of having a Will.
[Excerpt from SEBI circular dated February 2024]
The proposed revamping of the nominations framework (as outlined in this paper) aims to aid in reduction of unclaimed assets as well as smoothen the process for surviving family/beneficiaries/successors of the deceased investors.
Such revised and revamped nomination facilities will operate without affecting the prevalent systems of law governing transmission and succession:
● Rule of Survivorship (in case of joint ownership or joint holdings)
● When a person has died leaving a Will; and
● When a person has died without leaving a Will, i.e. intestate.
The Bottom Line
This reform makes it more apparent than ever that taking the time to create a Will is not just an act of personal responsibility but a crucial step in safeguarding the future of one's family and Beneficiaries.
By ensuring your wishes are documented, you can prevent your hard-earned assets from becoming part of the staggering amounts considered "unclaimed" simply because clear instructions were not left behind.
Let's take this opportunity to reflect on our asset management and take proactive steps towards securing a legacy that honours our intentions and provides for our loved ones.
