If you need to claim mutual fund investments after the death of an investor, there are steps you can follow to do so.
When a Mutual Fund investor passes away, there are provisions in place that allow legal heirs or nominees to claim the investments of the deceased. This process is referred to as transmission of units. In this article, we will outline the steps that claimants, such as joint holders, nominees, or legal heirs, can follow to transfer the Mutual Fund investments.
After an investor’s death, there are three categories of claimants who are be eligible for transmission of units in their name. These are joint account holders, nominee(s), and legal heirs.
The process of transferring units in different scenarions
When investments are made through a joint account, there can be up to 3 joint holders, and 3 types of claims that may arise:
- If the first holder passes away, the investments can be transferred to the surviving joint holders.
- If all joint holders pass away, the investments can be transferred to the nominee.
- If all joint holders pass away and no nominee is registered, the investments will be transferred to the legal heirs.
If an individual account is used to purchase Mutual Fund investments, there are 2 different types of claimants who can receive the MF investments:
If a nominee is registered, the Mutual Fund units can be transferred to the nominee ( as per details given by Investor).
If there is no nominee, then the investments can be transferred to the legal heirs. If there are multiple nominees or legal heirs, the investments will be divided among the eligible claimants during the transfer process.
When there are multiple nominees, the investments will be divided based on the percentage share specified in the nomination documents submitted by the deceased investor. If there are multiple legal heirs submitting a joint claim for the transfer of units, the investments will be divided based on the instructions provided in the probated will. In the absence of a valid will, all legal heirs will receive an equal share of the deceased investor’s Mutual Fund units.
If the deceased investor made Mutual Fund investments through a joint account or registered a nominee, the joint holder or nominee can file a claim for the transfer of investments by submitting essential documents, including:
- A letter from the claimant requesting transmission of units or a transmission request form.
- A notarized copy of the death certificate of the deceased investor.
- KYC documents of the claimant, such as Aadhaar Card, PAN Card, etc.
- KYC documents of the guardian along with the birth certificate of the nominee (if the nominee is a minor).
- Bank account details of the claimant, such as a cancelled cheque or attested copy of bank statement/passbook.
If the transmission amount is up to Rs.2 lakh, the bank manager must attest to the nominee’s signature using Annexure-Ia. If the nominee is a minor, the signature of the guardian must be attested in the form as well.
For transmission amounts exceeding Rs.2 lakh, the nominee’s signature must be attested by a notary public or a Judicial Magistrate First Class (JMFC). The attestation should be done in the space provided in the form under the signature of the nominee.
In case the transmission amount is equal to or below Rs. 2 lakhs, the following documents are required:
- Documents that establish the relationship between the claimant/s and the deceased investor/s
- Bond of Indemnity as per Annexure-II, so that the units are transmitted without legal representation.
- If the legal heirs have submitted the Succession Certificate, Probate of Will, or Letter of Administration where the claimant is named as a beneficiary, there is no requirement for Bond of Indemnity. In this case, an affidavit per Annexure-III from the legal heir/claimant(s) is sufficient.
- Each heir must give an individual affidavit as per Annexure-III.
- NOC from other legal heirs as per Annexure-IV is required if applicable.
On the other hand, if the transmission amount is above Rs. 2 lakhs, the claimant must submit individual affidavits as per Annexure-III from each legal heir. In addition to this, the claimant must provide any one of the following documents:
- Notarized copy of Probated WILL, or
- Succession Certificate issued by a court, or
- Letter of Administration or court decree if there is no will.
If the investments are being claimed by a joint holder or registered nominee, submission of the above documents to the mutual fund AMC is sufficient.
In case the investor has not registered a nomination for their Mutual Fund investments, the legal heirs can make a claim for the transfer of units. However, if the investments were made through a joint account, the transfer can only be claimed by the legal heirs if all joint holders are deceased and no nomination has been registered.
To initiate the process of transmission of units, legal heirs are required to submit a few additional documents, including an
- Indemnity Bond signed by the legal heir(s)
- Individual Affidavit by legal heir(s)
- Notarized copy of the probated Will or a copy of the Succession Certificate
These documents are in addition to the documents mentioned in the previous section. Hence, legal heirs are required to submit a significant amount of paperwork to get the investments transferred after the investor’s demise. Typically, the fund house completes the transmission of Mutual Fund units to the claimant within 30 days of receiving all the necessary documents.
If an investor has a joint holder or a registered nominee, it will simplify the process for their loved ones to receive the benefits of the investments.
