New Delhi, Aug. 6 -- When you invest in a mutual fund, buy insurance, or open a bank account, picking a nominee is one of the first things you are asked to do. It allows these institutions to know whom to contact if the account holder dies.

Because of this, many people assume that the nominee automatically becomes the owner of the money after the account holder's death.

However, the role of a nominee is usually more limited than most people think. In most cases, a nominee acts only as a custodian until the rightful legal heirs receive the assets such as shares, property or insurance money.

The final ownership of money in a bank account, mutual fund, or other assets is generally determined by a valid will, succession laws, and the right...