FD joint survivor is just a trustee of proceeds
In the case of a nomination by the deceased, while the banks will transfer the amount to the nominee, the nominee holds it in trust for the heirs of the deceased as per the succession law and the nominee will be required to transfer it to the heirs of the deceased (see (2010)10SC C 671)
We are a Hindu family of two brothers, one sister (married) and our 85-year-old mother. My father passed away without writing a Will. What will be the legal status of immovable properties, which are registered in my father’s name? There are a few fixed deposits too, which are in the joint names of my father and mother, either or survivor. In some places, I am the nominee and in some, my brother is the nominee. Please let me know the current legal status of these deposits as well.
By virtue of being Hindu, the succession of the estate of the deceased man would be governed by the Hindu Succession Act, 1956. As per the Act, in case there is no Will, the property of a deceased male is first distributed to the heirs within class I. Note that we have assumed that the property referred to does not belong to a Hindu Undivided Family (HUF). Accordingly, each of you shall be entitled to one-fourth share in your father’s immovable property.
Please note that in case of fixed deposits in the nature of either or survivor, the courts are of the view that unless the holder of the property makes it clear by way of an instrument that he intends to transfer/gift the proceeds to the joint holder/survivor, the joint holder/survivor is a mere trustee of the proceeds and though the banks will transfer the amount initially in the survivor’s name, the survivor has to transfer it to the heirs as per the succession law (see (2005)1MLJ672). Similarly, in the case of a nomination by the deceased, while the banks will transfer the amount to the nominee, the nominee holds it in trust for the heirs of the deceased as per the succession law and the nominee will be required to transfer it to the heirs of the deceased (see (2010)10SC C 671). Therefore, with regards to the fixed deposits, it shall be subject to the same principles applicable to interstate succession of a Hindu under the Act and each of you, including your mother, sister and brother shall be entitled to a one-fourth share in the fixed deposits.
Marylou Bilawala is partner, Wadia Ghandy & Co. Advocates, Solicitors and Notaries. Queries and views at email@example.com
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