Mutual funds can be profitable, but they carry certain risks. Unexpected fluctuations in the stock market can impact the investment.
Knowing who can claim the investment and whether family members can utilize it is essential in the event of the account holder’s death.
When a mutual fund investor dies, legal heirs and nominees can claim the investment through unit transmission. Here’s how the claim process works:
The investment can be transferred to another beneficiary when the depositor passes away. The individuals who initiate this transfer, known as claimants, play a crucial role in the process.
There are three types of claimants: Joint Account Holders, Nominees, and Legal Heirs. An adult nominee can claim the investment if the investor has no other heirs.
The mutual fund units can be transferred to the nominee’s name by submitting Form T3 to the Registrar and Transfer Agents (RTAs) or directly at the Asset Management Company (AMC) branches.
The following documents need to be submitted along with the application:
- The depositor’s Death Certificate,
- The Claimant’s PAN Card,
- The KYC Form,
- The Canceled Cheque/Bank Statement/Passbook and
- The Deceased’s ID proof.
All information should be provided according to the instructions in Form T3. If the claim amount is up to Rs. 5 lakhs, the Bank Manager Nominee’s signature should be verified according to Annexure-I(A).
However, if the claim amount is more than Rs. 5 lakhs, a Notary Public or a Judicial Magistrate First Class must attest the nominee’s signature.
If the nominee is a minor, additional documents are required. These include a copy of the child’s birth certificate, the child’s parent’s PAN card, the parent’s KYC, and the parent’s attested signature.
Form T3 should be completed, and original documents should be carried out for final verification. The legal heirs can claim the investment without a registered nomination in the mutual fund account.