When a mutual fund investor dies, there are certain provisions that ensure that the legal heirs or nominees can claim the investments of the deceased. This process is called ‘transmission of units’, which is the way mutual fund investments are transferred to the claimant after the death of the investor.
You invest your hard-earned money to meet various financial goals, be it for yourself or your loved ones. But what happens to these investments if you pass away suddenly? Who will get the benefit? Will your family members be able to claim these after your death? Such questions can worry you, as death is a certainty.
When a mutual fund investor dies, there are certain provisions that ensure that the legal heirs or nominees can claim the investments of the deceased. This process is called ‘transmission of units’, which is the way mutual fund investments are transferred to the claimant after the death of the investor.
In this article, we will understand how claimants — such as joint holders, nominees, or legal heirs — can transfer mutual fund investments after the death of an investor
Who can claim MF units after unit holder’s death?
The person or people who submit a claim to a MF house to transfer the deceased investor’s investments to their name are called claimants. There are three types of claimants who may be eligible for the transmission of units following the death of an investor:
- Joint Account Holders
- Nominee(s)
- Legal Heirs
Vinod Singh, CEO and Co-Founder of FINHAAT, explains necessary steps and documentation involved in this process.
“If an investor who is a ‘resident individual – single holding’ is deceased, an adult nominee (claimant) can get the Mutual Fund units transferred in his/her name by submitting Form T3 to the RTAs (of the respective AMCs) or directly at the AMC branches. Alongside this application they would need to submit documents (as stated in Form T3), which includes Death Certificate, PAN Card of claimant, KYC Form, Cancelled Cheque/Bank Statement/Passbook, ID Proof of the deceased person,” Singh says.
If the transmission amount is up to Rs 5 lakh, attestation of signature of the claimant by the bank manager as per Annexure-I(a) needs to be provided. For amount greater than Rs 5 lakh, the signature has to be attested by a Notary Public or Judicial Magistrate First Class (JMFC).
In case the nominee is a minor, then the following additional documents need to be provided:-
(i) Copy of Birth Certificate of the minor
(ii) Copy of PAN Card of the Guardian
(iii) KYC form of the Guardian
(iv) Signature attestation of the guardian (as per the bank account of the Minor or the joint account of the minor with the guardian)
“All these documents would need to self-attested(by claimant)/notarized by relevant authority as stated in Form T3. Originals of the documents need to be carried during submission for verification,” he adds.
In case there is no nomination registered on the account, the legal heir needs to submit additional documentation. Information on this is available on amfiindia.com website or at the respective AMC branches.
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This blog is purely for educational purposes. Mutual fund investments are subject to market risks, read all scheme-related documents carefully.
