When you forget to nominate...

In Why smart investors nominate and What every nominee must know, we spoke of the importance of nominating someone for your assets and how to go about it if you are a nominee.

Firdaus Ashraf shares the experience of a friend who had to work hard at getting his father's money.

My friend's dad passed away a few months ago. A week after that, my friend decided to sit with his mother and help her put her finances in order. He visited both the banks (one was a cooperative bank and the other was a nationalised one) in which his father had accounts and was taken aback to find out neither account had a nominee. These accounts were also not held jointly with his wife or children.

His father had been a loving husband and a great dad to his kids who just didn't give his bank account a second thought because he assumed the money would automatically go his wife.

Do come by again!

On visiting both the banks and being informed of the current status of the accounts, he was told to come back in a week's time.

The banks said they needed this time to check their manual records to see if his father had named a nominee when he opened the bank account (in the days before computerisation).

He was lucky in the case of the nationalised bank. On going through their records, they realised his father had indeed nominated his mother. Apparently, the bank staff had forgotten to update the nominee form in their computer system.

However, he had no such luck with the co-operative bank. There was no nominee to the account.

You will have to run for your money!

What did he have to do?

The cooperative bank told him to get three stamp papers of Rs 100 each and another for Rs 50. This was required for the indemnity bond (read Why Smart investors nominate to get more information on this).

On visiting the stamp paper office, my friend was faced with a queue that seemed to have no end.

He returned to the cooperative bank and requested the manager of to opt for the franking procedure instead. But the manager insisted on the stamp papers.

Due to the difficulty in getting stamp papers, franking machines have been installed in some banks. So, instead of impressing stamps on documents, the latter can be franked with special adhesive stamps by the franking machine.

My friend had no choice but to join the queue at the stamp paper office. After waiting for an hour, he was told they had run out of stamp paper and was requested to return the next day.

The next day, he was told he could get stamp papers of Rs 100 denomination, but the office was out of stock when it came to the Rs 50 variety.

Back to square one.

The third time, he got lucky. He joined the queue early in the morning (to circumvent the shortages that tended to crop up later) and the necessary stamp papers.

Believing his ordeal had come to an end, he promptly went to the co-operative bank and submitted the stamp papers. That was when he was told his mother would have to wait for another month to get the money.

The board of the bank would decide, in their monthly meeting, about transferring the money to his mother's savings account.

One month has passed since then, but his mother is still waiting for the money.

The nationalised bank claimed  his mother was the legal nominee. Yet, here too, it was not a smooth ride.

This time, he visited another nationalised bank that had a franking machine to get the indemnity bond franked and signed by his mother.

Then, the bank manager found out there were a few more rules to be followed. My friend was told to submit a notarised copy of the death certificate and ration card proof.

After this trying experience, however, the money was transferred to his mother's account within a day.

When claiming any money from a deceased, the best thing to do is approach the mutual fund or the bank or the post office (wherever the money is) and ask them for the entire procedure -- what documents they would need, which of these documents have to be notarised, etc. Get all your documentation in order before you approach them next. It saves a lot of bother and undue running around.

Finally, talk to your parents and ask them to nominate their investments, if they have not already done so. If they refuse, request them to at least draw up a Will.

Most important, remember you need to do the same too.