Every person has absolute right over his property during his lifetime other than those tied up as joint family property or a trust property or over which he has a right limited to his life.
In the application form for opening an account in Senior Citizens Saving Scheme, the investor will have to disclose the name of nominees, affix their photographs and also obtain their signatures. The Government introduced this scheme as a major relief to senior citizens to lead a peaceful life, but asking them to declare openly the nomination details along with photos and signatures may take away their peace completely. It is always advisable to register the nominations as a secret document.
The authorities might have experienced certain difficulties while identifying the correct nominees for releasing the payment but the investor should not be made to suffer.
If the investor decides at a later stage to change the nomination or donate the proceeds to any institution, he/ she may land into problems with undesirable consequences, while it may even endanger the safety of their life.
Every person has absolute right over his property during his lifetime other than those tied up as joint family property or a trust property or over which he has a right limited to his life. It is for this reason even a Will can be changed. It is only the last Will which will have effect. It takes effect only on the death of a person. A Will may be kept secret from the beneficiaries so that the testator may live in peace during his lifetime without the beneficiaries questioning his distribution of wealth among them.
However, in the case of investments, where nomination is made, the requirement asking for their signature and/ or their photographs would tantamount to disclosure to beneficiaries of such nomination even during the lifetime of the investor.
The law is that a nominee only receives the amount as representative of the estate of the deceased, unless such nomination is supported by a Will. It is only assignment which makes the assignee entitled to the same as his own.
It is true that nomination may also be changed during the period of investment without disclosing the reason for the change.
The practice of getting consent from nominees with proof of their identity is more convenient for institutions, which accept deposits and other investments. It should be possible to give an option for the investor to give the nomination without the nominees’ signature/ photographs but with enough details of relationship and identification of the nominee/s.