Key idea
A nominee and a will can name different people. When they clash, it helps to know which one actually decides who inherits.
This is where the nominee nuance from earlier becomes concrete. A nominee receives the money from an insurer or bank; a will states who should ultimately own it. When the two disagree, the outcome is not always obvious, and the confusion causes real disputes.
The general principle
The nominee
- Receives the funds quickly
- Deals with the insurer / bank
- Often a receiver, or trustee
- Not always the final owner
The will
- States who inherits
- Governs ultimate ownership
- Generally takes precedence on ownership
- But needs execution, which is slower
Why you want them to agree
In broad terms, the nominee collects the money, but a valid will generally decides who is entitled to keep it (specific rules vary by asset type, and some cases have their own treatment). The clean solution is to make your nominee and your will point to the same people, so there is nothing to contest.
Align the two. Keep nominees current and write a will, so the person who receives your money is the same person meant to have it. Where large or complex assets are involved, this is worth confirming with a professional.
Finished reading?
Marking this complete counts today, and your streak becomes day 1.