Intestate
Dying without making a will. The property then passes to heirs under the succession law that applies to the person, which may not be what they intended.
In plain language
A person who dies without a will is said to have died intestate.
The property does not disappear or pass to the state. It is inherited by the heirs in accordance with the laws of succession applicable to that person. The problem is that the law decides who gets what, not the person who built the wealth — and the workbook is direct that the distribution may not be what the person would have intended.
That is why the workbook insists that estate planning is not only for the retired or elderly: it applies to everyone who has assets that could be of use to another after their death.
How it works
Which succession law applies depends on the person's personal law. The workbook names three:
| Law | Applies to |
|---|---|
| Hindu Succession Act, 1956 | Hindus, Buddhists, Jains and Sikhs |
| Indian Succession Act, 1925 | Christians, Jews and Parsis |
| Mohammedan personal laws | Inheritance of Muslims |
The costs of dying intestate, in the workbook's words: distribution of the estate may suffer from lengthy legal procedures and administration costs, adding both inconvenience and financial burden to the family.
What does not solve it.
- Nomination. A nominee receives money as a trustee for the legal heirs. In the absence of a will, the rights of the heirs under the applicable succession law prevail over the nomination. Nomination simplifies payment; it does not decide who ultimately owns the money.
- Joint holding. Access passes to the joint holder on the first holder's death, but if the heirs contest it, the joint holder's operational right can be superseded by the laws of succession or a will.
What does. A valid will — in writing, signed by the testator and attested by two witnesses, and ideally with a residuary clause so that no asset is left uncovered.
A worked example
Illustrative figures. Mr Iyer, 66, dies without a will. His estate:
| Asset | Value | Arrangement |
|---|---|---|
| Flat in Chennai | Rs 1,20,00,000 | Sole name |
| Mutual funds | Rs 35,00,000 | Nominee: his younger son |
| Bank FD | Rs 15,00,000 | Joint with his wife |
| Total | Rs 1,70,00,000 |
Estate = 1,20,00,000 + 35,00,000 + 15,00,000 = Rs 1,70,00,000
He had always told the family that his wife should have the flat for her lifetime and the two sons should share everything else equally.
Because he died intestate:
- Nothing he said binds anyone. The whole Rs 1.7 crore is inherited by his heirs under the succession law applicable to him.
- The younger son receives the Rs 35 lakh of mutual funds as nominee — but as a trustee for the legal heirs, not as owner. His elder brother is entitled to his share under that law.
- His wife can operate the Rs 15 lakh FD as joint holder; if the heirs dispute it, her operational right can be superseded by succession law.
- The flat goes through the legal procedure for transferring an estate to heirs, with the time and administration costs the workbook warns of.
A two-page will, attested by two witnesses, would have delivered exactly what he wanted.
Why NISM asks about it
Chapter 8, section 8.1.6 (Estate Planning), defines dying intestate, names the three personal succession laws, and explains why nomination and joint holding do not override the heirs' rights. Section 8.2.7 sets out the essentials of a valid will. Expect a definition question, a question matching a community to its succession law, and a question on whether a nominee or the legal heirs ultimately take the money when there is no will.
Common exam traps
- Intestate means without a will, not without heirs or without a nominee.
- The nominee is a trustee, not the owner. Without a will, the heirs' rights under succession law prevail over the nomination.
- Match the law to the community. Hindu Succession Act, 1956 covers Hindus, Buddhists, Jains and Sikhs; the Indian Succession Act, 1925 covers Christians, Jews and Parsis; Muslims are governed by personal law.
- Joint holding gives access, not final ownership. A contest among heirs can supersede it.
- Estate planning is not only for the elderly. The workbook says it applies to anyone with assets of use to another after death.
- A will need not be registered to be valid, but must be in writing (with a limited armed-forces exception), signed and attested by two witnesses.
Where this is taught
- Series X-B · Chapter 14: Basics of Estate Planningintroduced here
- Series XVII · Chapter 8: Special Considerations in Retirementintroduced here
Related terms
- NominationThe account holder's written direction naming who receives the securities on death — up to ten nominees for a demat account, with percentages that must total 100, mandatory for single holdings.
- Estate planningDeciding during your lifetime who is to receive which of your assets after your death, and documenting it — mainly through a Will and nominations — so heirs can claim them easily and cheaply.
- NomineeThe person you name to receive custody of your money or securities when you die — a custodian who must pass the asset to the legal heirs, not the owner of it.
- Succession certificateA certificate issued by a District Court under the Indian Succession Act, 1925 authorising the legal heirs of someone who died without a Will to collect the deceased's debts and securities.
- WillA written legal declaration of how a person wants their assets distributed after death. Registration is not compulsory but preferable; without a Will, assets pass under personal laws.
- Beneficial nomineeA life insurance nominee who is a parent, spouse or child of the policyholder — entitled to keep the claim money in their own right instead of holding it in trust for the legal heirs.
- CodicilA supplementary document that explains, alters or adds to a Will and is read as part of it — executed and attested exactly like the Will itself.
- EstateEverything a person owns and owes at the time of death — real estate, investments, insurance policies, bank accounts and items of value — the pool that estate planning organises for distribution.