New Delhi, Oct. 29 -- Naming your children as nominees for mutual fund investments does not necessarily guarantee that they will inherit the money. Under Indian succession law, a nominee generally receives the investments from the asset management company (AMC), but the ultimate ownership depends on the investor's valid will or, in its absence, the applicable succession laws.

This means a child named as the sole nominee may have to share the inherited investments with other legal heirs. Conversely, a child who is not named as a nominee may still be entitled to a share of the investments under a will or succession law.

Aditi Sharma, partner at Khaitan & Co, said nomination is a mechanism to facilitate the transfer of investments after an...