The death of an investor can be a trying and emotional experience, and handling their financial matters—mutual fund investments included—needs to be well understood. In this blog, we covered claiming mutual fund investments upon the death of an investor. We discuss who is eligible to claim the investments, what documents should be produced by the joint holders/nominees and legal heirs, and a step-by-step process for going through the claim procedure.
Mutual funds are popular schemes for long-term growth, and most people have meaningful investments in such funds. On the death of an investor, claiming the mutual funds must be done carefully to provide the real beneficiaries with the assets. Here, the detailed process and paperwork help the legal heirs, joint holders, and nominees smooth their way through the claim procedure.
Who Can Claim Mutual Fund Investments?
When the investor passes away, the entitlement to claim his mutual fund investments will be based on the structure of the account:
- Nominees: If there is a nominee, he will have the initial right to claim the investments. A nominee may claim the investments without any further legal proceedings.
- Joint Holders: In the case of joint account arrangements, the surviving account holder(s) are entitled to continue managing the investments.
- Legal Heirs: When no nominee is named or when the nominee dies before the investor, the legal heirs—ascertained by the will of the investor or, in its absence, through the laws of succession—are entitled to take over the investments.
It is important to recognize who can claim such assets in order to guide the requisite documentation and claim procedure.
Documents necessary for Joint Holder or Nominees
For nominees or joint holders who are claiming mutual fund investments, the following documents are generally required:
- Death Certificate: Official document attesting to the investor’s death.
- Nominee/Joint Holder Identification: Identification and address proof (like PAN card, Aadhaar card, or passport) of the nominee or surviving joint holder.
- Account Details: Recent mutual fund statement or passbook reflecting the investor’s holdings.
- Request Letter: A formal request or application to the mutual fund house expressing the desire to claim the investments.
- KYC Documents: Recent Know Your Customer (KYC) documents of the nominee or joint holder, if not already in possession of the fund house.
These documents assist the fund house in confirming the claim and transferring the investments effectively.
Required Documents for Legal Heirs
In cases where legal heirs are concerned, there is extra documentation required to confirm their right:
- Death Certificate: Similar to nominees, there needs to be an official death certificate.
- Legal Heir Certificate/Succession Certificate: Certificate given by the concerned authority validating the legal heirs of the deceased person.
- No Nominee Declaration: Declaration declaring no nominee was nominated, if any.
- Identification Proof: Identity and address proofs issued by the government (PAN, Aadhaar, passport, etc.) of the legal heirs.
- Will or Probate Documents (if available): If the investor had a will, probate or letter of administration may be needed to confirm the heirs’ claim.
- Mutual Fund Account Statement: Copy of the last mutual fund statement or passbook.
Ensuring the right documentation facilitates easy transfer of the investor’s assets to his/her rightful legal heirs.
Process to Claim Mutual Funds After the Death of an Investor
Procedure to claim mutual fund investments is generally as follows:
- Obtain the Death Certificate: Secure an official death certificate from the relevant authorities.
- Collect Required Documents: Gather all necessary documents as listed above, whether you are a nominee, joint holder, or legal heir.
- Fill Out Claim Forms: Obtain and complete the mutual fund claim forms from the respective fund house’s website or local branch.
- Submit the Application: Submit the completed claim form along with the required documents either online or by visiting the mutual fund branch.
- Verification Process: The mutual fund house will verify the documents and process the claim. This step may include additional verification if legal heirs are involved.
- Approval and Transfer: Once the claim is approved, the mutual fund units are transferred to the claimant’s account or new nominee account. Any pending instructions, such as dividend reinvestment options, should be updated accordingly.
- Confirmation: The confirmation letter or e-mail is dispatched by the fund house to the claimant with a confirmation stating that the claims process is final.
By following these steps carefully, the claim process can be accelerated and the mutual fund investments can be transferred to the rightful claimant without any undue delay.
Final Thought
It is a complicated process to claim mutual fund investments in case of an investor’s death, but knowing the requirements and procedures can make the transition smoother during a trying time. Whether you are the nominee, the joint holder or the legal heir, having proper documents and performing the right things is the ticket to a successful transfer.
Precaution at your end, such as reviewing your own investment particulars from time to time and getting your KYC and nomination updated, can also steer clear of difficulties in the times to come. Always try to get professional assistance if you are not certain regarding any aspect of the process.
