Impact of Nomination on Society
In this time nomination is a basic form of inheritance planning because often the subscriber who has no son or who wants to exclude an heir from his/her property after his/her death appoints the dear ones as nominee is his/her bank deposit or insurance policy or provident funds. And all take it as law that nominee will be the owner of the nominated property. Our law permits that a subscriber who has a family has absolute discretion regarding the distribution of the amount at his or her credit at the time of his/her death among the members of that family. He may exclude any one or more of them in favor of another or others of them.153Financial assets like life insurance policies, bank deposits, and provident funds require a person to mention a nominee who could claim the asset after the account holder’s death, there is no room for confusion.154 But appointing a nominee has an impact on society. Nominee excludes all the legal heirs of the subscribers or depositors. It is the violation of the Muslim personal law. For this reason the Muslim community can be unpleased because all communities want that their norms, rules, customs be uphold than other. Besides when a depositor or policyholder or public service holder appoints a nominee then the society feels a bad impact. The customary succession laws are violated by the nomination system which may emerge a new chaotic situation in the society and by which the society may be affected badly. On the other side if the very depositor or policyholder or public service holder dies without leaving any nominee for receiving the deposited amount then the society also feels another type of impact. That is the legal heirs have to run here and there to collect the various documents to prove that the person is dead and they are the legal claimants of the deposited or policy amount. Sometimes, the failure of the heirs proving their claim is resulted that the amount is not paid. These impacts may hamper of the society’s normal feelings. Though till today in Bangladesh it is not arisen any problem, but there is no surety that in the future it will not be questioned in the court and will not be developed any problem in the society.
5.2 When Nominee Present
In Bangladesh the concept of nomination is not so clear. Who appoint the nominee, who are the nominees and who are the legal heirs of the deceased subscriber, these three are not more experienced and aware on this system. They all know that nominee is the absolute beneficiary of the nominated property. They do not know that if the legal heir makes the question to the court they will get the remedy. Who know this system very well, during the distribution of the deceased’s property, they keep silent avoiding the hassles, because they know if the truth is published, the matter goes to the court and the problem will be more serious than that of which is occurred when whole the property is got by the nominees. If the depositor or policyholder or public service holder appoints a nominee and before the maturity of the fund, he/she dies, according to the statutory laws of Bangladesh, the very nominee receives whole the amount. All the Acts155 of Bangladesh regarding the nomination provide that the concerned authority will pay the deposited money to the nominee only, no succession law will be applicable in this regard. It is the violation of the Muslim personal law? Even being a Muslim based country, Bangladesh passes the Act against the Muslim personal law.
The Provident Fund Act156 provides that where any nomination duly made in accordance with the rules of the Fund, purports to confer upon any person the right to receive the whole or any part of such sum on the death of the subscriber or depositor occurring before the sum has become payable or before the sum having become payable, been paid, the said person shall on the death of the subscriber of depositor, become entitled, to the exclusion of all other persons, to receive such sum or part thereof, as case may be. Notwithstanding anything contained in the Succession Act, 1925, any person who becomes entitled to receive the money, may be granted a certificate under that Act entitling him to receive payment of such or part, and such certificate shall not be deemed to be invalidated or superseded by any grant to any other person of probate or letters of administration to the estate of the deceased. The Insurance Act157 provides that where a nominee or nominees survive the person whose life is insured, the amount secured by the policy shall be payable to such survivor or survivors. Under the Insurance Act the nomination entails payment by the Insurance Company to the nominee to obtain a complete discharge. Once the amount under the Policy is paid to the nominee, the nominee would hold it in Trust or the Estate because under the Insurance Act there is no legislative provision that the nominee would obtain any other right.158
According to Muslim law the benefits over a savings account or a fixed deposit or a policy shall form part of the estate of the policy owner or depositor and therefore, the nominee shall be regarded as a mere executor but not an absolute beneficiary, and the benefits over the policy or account upon the death of the policy owner or account holder will be subject to his (the policy/account owner) debt and to be distributed among the beneficiaries of the deceased (the policy/ account owner) according to the principles of Muslim law of succession.159
But the practice in our country is that the nominee will be absolute beneficiary of the nominated money. It is absolutely against the Muslim law of succession. It may also be against the humanity. Because when a person nominate another who is not the legal heir of him/her. If the person without leaving any property except the nominated money dies accidentally survived with the minors and after his death the nominee takes the whole property. Who will support and maintain the minors. It is against the humanity. If the law support that nominee is only an executor, the minor will not face the problem of poverty. Beside when there is a widow but she is not the nominee of her husband’s bank deposit or policy amount, at this circumstances if the nominee receives the deposited money, what the problem may be faced by the widow all sensible person can imagine that. It is inhumanity. In Bangladesh it happens now and then, here and there. But there is no official record in our hand. In the last year in India in a case it is noticed that Harsha Nitin Kokate, a widow, was seeking permission to sell some shares held by her late husband. The Court noted that as she was not the nominee, she had no ownership rights over the shares because her husband had nominated his nephew in favor of the shares.160 If Harsha Nitin Kokate is property less, who will maintain her. So it can be said that the impact of the nomination system is not only against the Muslim personal law but against the humanity.
5.3 When Nominee Absent
A question that quite often disturbs our mind is how to ensure that our near and dear ones will not face any hassles in possessing and enjoying the assets that we have created during our lifetime. The solution to this problem is nomination. Every coin has two sides. Nomination is quite helpful but it does not solve the problem completely. Because if a person dies without nominating anyone, or if a nominee dies before the depositor or subscriber the nomination automatically gets cancelled until and unless the subscriber furnishes fresh nomination form to the authority; in such an event the authority transmits the deposit or policy amount in favor of the legal heirs or the holder(s) of the succession certificate. Thus the heirs of the nominee are not entitled to the deposit or policy amount if the nominee has predeceased the depositor or subscriber or policyholder. The legal heirs may have to run from pillar to post and produce several kinds of certificates to claim the assets left behind by the deceased subscriber. If nominee exists, there are no such hassles since the bank or insurance company can easily pay the money to the nominee without incurring any liability. In case of nomination the bank or insurance company gets out of the picture as soon as the payment is made to the nominee. When the owner dies without making any nomination. In all cases the legal heirs have to prove that the said person has died and they are the legal heirs of him/her. To prove this there are some requirements.161
The legal heirs will have to file a petition in a court in their district. The court will then advertise in the newspaper to invite objections, if any. If no one contests the transfer of the ownership of the deceased’s assets, the court will clear the succession and provide a certificate named succession certificate contained the successors’ name. After getting the very certificate, again, they have to submit the following documents to the concerned authority.162
- Notarized copy of the death certificate;
- Letter of Indemnity duly supported by a guarantee of an independent surety acceptable to the authority on non-judicial stamp paper of requisite value;
- An Affidavit on non-judicial stamp paper;
- No Objection Certificate(s) from all the other legal heir(s);
- Any one of the below mentioned documents;
- Succession certificate
- Copy of probated will
- Letter of Administration
So it has a great impact on society. The legal heirs are to invest inhuman labor and money with an extreme tension to get the assets from the very concerned authority. Sometimes they are to face some unexpected behaviors from the officials to be a member of a civilized and gentle family which is very insulted to them. So in the absence of the society feels a severe bad impact. Though the Muslim personal law and humanity is survived there, it has no role on this matter.
The modern concept of nomination is that nominee is only authorized to receive the amount and the legal heirs will have the absolute right over the deposited amount. Some argue that it is somewhat disturbing. Because it not only kills the concept of nomination but also gives rise to unnecessary complications. If ultimately the legal heirs become the owners of deposit or policy amount, why should one nominate anyone at all? The very purpose of nomination is to ensure that the nominee will get the benefit of the proceeds after the death of the policyholder or depositor. What interest has the nominee got to receive the monies payable on due date if the same are to be turned over to the legal heirs. Why should he/she wastes time and money in obtaining a death certificate, go through the time-consuming procedures of lodging claim, run the risk of holding funds and maintain necessary records of payment and receipt documents, if ultimately the funds are to be turned over to the legal heirs? If so, most of the nominees will turn indifferent and the monies of the deceased persons will lie dormant with the insurance companies or the post-offices or the banks or the provident funds.163 There are several opinions on this topic that whether nomination is acceptable or not. Nomination is acceptable but under some condition.164
5.4.1 Arguments in Favor of Nomination
Nomination ensures smooth transmission of the property in the records of a bank or an insurance company or provident fund. Insurance policies or bank accounts or contract forms of a service holder contain the provision for nomination, whereby a subscriber can nominate a person to whom the proceeds of the policy would be handed over by the concerned authority after his/her death. Purpose of nomination is to make certain the person with whom the authority has to deal and not to create interest in the nominee to the exclusion of those who in law are entitled to the estate of a deceased member. Without nominating if anyone opens any policy or bank account or joins in the public service and dies before nominating anyone what can happen it is made clear aforesaid, so one should protect one’s legal heirs from the hassles.165 Nomination is a concept which makes certain the subscriber that his/her amount will not go to the hell after his/her death. There have various examples in our country if one observes then it will be noticed that there are several bank accounts where there is no nominee in the account and the heirs failed to prove that their claim is legal, so the amount have not been paid anyone. It has remained unpaid in the bank. To make certain this issue and to protect the heirs from the harassment, this nomination system is emerged. Suppose there is no nomination system in anywhere e.g. bank deposit, insurance policy, provident fund etc. Now a depositor or policyholder or subscriber dies then his/her legal heirs will have to go through the process of producing all kind of certificates like death certificates, proof of relation etc., so, to simplify, if a nominee exists, these hassles don’t happen, since the authority is bound to transfer all assets to the nominee. Then, it is a chaos between nominee and legal heirs that whether nominee will be considered the absolute beneficiary or with the heirs they will receive the deposited money as a sharer. Besides a normal question may arise that if the nominee is merely an executor or trustee why he/she will take the responsibility on his/her shoulder. Again, to avoid the nominee’s absolute ownership over the nominated asset, one can nominate someone as a nominee for one’s deposit or policy amount but write a Will saying that the proceeds from all one’s investments go to someone else. Even if such Will of the deceased person is produced, banks, insurance firms and other authority will still take a long time to transfer funds to the legal heirs mentioned in the Will through the nominee.166
In Bangladesh a legal heir is a person whose name is not determined by the Will but through the personal law of the community it may be Hindus or Muslims. Where the system of will exists there in case the deceased has not written a Will and where the heirs determined by the personal laws, in both the cases there is no nomination system then the legal heirs are decided in accordance with the succession laws, wherein the structure has been clearly defined as to who is to get how much proportion of the deceased’s assets. The liability of the insurance company or bank or provident fund comes to an end after handing over the policy amount or deposit money to the heirs. Is it not a great problem for the concerned authority to pay the money? Has it no impact over the society? If nominee exists, the authority easily can hand over the money to the nominee. The burden on the authority is decreased by this system. So it is seamed that through the nomination system the society may feel better than without the nomination system.167 One of the primary benefits of using nominees is that it can provide the legal heirs and the authority a healthy environment to receive and pay the money without any hassles.
5.4.2 Arguments against Nomination
When opening a savings account or a fixed deposit with a bank, or an insurance policy or joining the public service, the concerned authority asks for the nomination form. Some banks, insurance companies, in fact, make the nomination process a part of the application form itself and there is no need to fill up a separate form. One will have to fill in details of who the nominee is in thepresence of two witnesses. It won’t take more than a few minutes but it will save a lot of time and hassles for one’s loved ones if something unfortunate were to happen to the very one.168
But it is aforesaid mentioned that every coin has two sides. The main problem is that the present nomination system of Bangladesh is fully contradictory with the Muslim law of succession because Muslim law of succession is based on the Quran. There it is said that the property of the deceased person will be distributed among the legal heirs and also described that in whose presence, who will be excluded from the inheritance. But the laws of Bangladesh provide that in the presence of the nominee, no legal heirs will be entitled to receive the money from the bank or provident fund or insurance policy. But it is not said that nominee is the absolute owner or beneficiary of the nominated amount. It is in practice that the nominee is the absolute beneficiary of the said amount which fully violates the Muslim personal law. If the system is developed like India and Malaysia then it will be healthy for Bangladesh. Unless and until the new law is passed in Bangladesh to fulfill the demand of the society especially similar to Muslim personal law, it is contradictory not only to the Muslim personal law but also to the humanity.
Besides, it is a system which fully demolishes the morality and humanity because where the statutory law exists, no morality can exist there. No personal law permits that the nominee will be the absolute beneficiary of the nominated property. About the nomination the view of Muslim personal law is aforementioned.
The Christian law of succession in India and Bangladesh provides as follows:169
“When a person dies intestate after making a fixed deposit in a bank, the nomination made in favor of one will not disentitle the legal heirs to claim a distributive share.
Unless a contrary intention is proved, when an amount is deposited in a joint account on the terms that it was to be payable to either of the survivor, it must be included in the portable property among the legal heirs, for the purposes of intestate succession.
Succession to the service benefits of a Government servant, who dies intestate, cannot be affected by nomination. A nominee is only a trustee for legal heirs and the right of the legal heirs cannot be taken away by nomination.
A nominee’s interest in the amount received under a policy of insurance, when the assured dies intestate, is subject to the claims of legal heirs of the assured, under the law of succession.”170
So the existing nomination system is not comfortable for the society’s health. To maintain the society this law should be amended.
Nomination not only ensures speedy payment of the amount but also helps to spare the subscriber’s loved ones unnecessary suffering. It has both the sides good and bad. The good sides are more spread than the bad sides. The worst side of it is the present system of nomination is against the Muslim personal law. If the system is modified like Malaysia then it will be the most planning system in the case of inheritance.
The Muslim world has been over-burdened for too long by western modes of social and economic thought. A large portion of the Muslim world had been subjugated culturally, economically and politically by the colonial powers. Even though they have achieved independence from their colonial masters, the colonial principles are still deep rooted in the social, economic, political and cultural life of Muslim communities.171 We have to bring out from this system and have to follow our own system derived from the holy Quran and Sunnah. And all the laws should be modified according to the Shariah law.