What All You Need to Furnish For Transmission of MF Units?
The need to transmit mutual fund units arises in case of the death of the unit holder(s). Completing formalities can sometimes be a time consuming and exhausting process. However, having knowledge about the transmission process beforehand can save you a lot of time and effort during such testing moments.
Hence, PersonalFN has listed down the procedure which can help you to transmit mutual fund units in the following different scenarios.
PersonalFN believes that it is imperative that everyone should have a nominee for all their investments and also have an appropriate will in place. Transition of wealth to the legal heir(s) of a person dying intestate (i.e. dying without valid will) may be a difficult task.
- In case of the death of the first unit holder
If the first unit holder passes away, the units can be transmitted to the second unit holder. For transmission of units, the second holder will need to submit,
- - A letter informing about the death of the first unit holder (in the format required by the fund house)
- - Copy of the death certificate attested by the bank manager / gazette officer / asset management company
- - The second unit holder's bank details (as specified by the fund house)
- - KYC of the second holder
- In case of the death of single or all holders (with nomination)
If a unit holder (or all holders), who has appointed a nominee in his investment, passes away, the nominee will be eligible to get the units transmitted in his name. For doing so, the nominee will have to submit,
- - A letter (in the format required by the fund house)
- - Attested copy of the deceased's death certificate
- - Bank details (as specified by the fund house),
- - KYC of the nominee
- - Indemnity (if the amount to be transmitted is equal to or greater than the threshold limit set by the AMC). For example, HDFC Mutual Fund requires nominees to provide indemnity (in a specified format) in case the transmission amount is in excess of Rs 5 lakhs per investor.
- In case of death of the single or all holders (without nomination)
If a unit holder (or all holders), who has not appointed a nominee, passes away, then the claimant will have to submit the following documents, apart from the ones mentioned above.
- - Individual affidavits from the legal heir(s) (in the required format)
- - Indemnity bond from the legal heir(s) (in the required format)
- - If the amount to be transmitted is below the threshold limit set by the AMC then any appropriate document proving the relationship of the claimant with the deceased
- - If the amount to be transmitted is equal to or greater than the threshold limit set by the AMC, then any one of these are required to be submitted - Notarized copy of the Probated Will, or Legal Heir Certificate or Succession Certificate or Claimant's Certificate issued by a competent court, or Letter of Administration, in case of Intestate Succession.
- In case of the death of the Karta
A Karta is the manager of the affairs of the Hindu Undivided Family (HUF). If the Karta passes away, then the newly appointed Karta will have to submit the following for transmission of units:
- - Letter requesting for change of Karta (as per the specified format)
- - Attested copy of the death certificate of the deceased Karta
- - KYC of the Karta and of the HUF
- - Indemnity bond signed by the new Karta and all the surviving coparceners
- - Duly certified bank certificate stating that the signature and details of the new Karta have been appended in the HUF's bank account
- - In case there are no surviving coparceners or there is an objection from any of the surviving coparceners, then any of these are required to be submitted - Notarized copy of Settlement Deed, or Notarized copy of Deed of Partition, or Notarized copy of Decree of the relevant competent Court
Procedures for the transmission of mutual fund units may differ slightly from fund house to fund house. Hence, PersonalFN suggests that you shouldn't follow the aforementioned process blindly and confirm the same with all the fund houses whose units are required to be transmitted.
PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.
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