Units can be transferred to nominee on death of investor

This is called transmission of units. All fund houses follow a uniform, well-documented process when it comes to the transmission


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I am 28 years old and earn Rs.65,000 a month. My monthly outgo includes a personal loan equated monthly instalment of Rs.10,000 and other household expenses of around Rs.20,000. I want to invest in large- and mid-cap equity funds. I used to invest in Kotak Select Focus fund but then stopped. Which f unds should I should invest in?

—Kavisha Anand

Before selecting funds, you would need to decide on how much you are planning to invest a month, and with what time frame in mind. Given your young age, you have the opportunity to get started with your long-term (more than 10-15 years) investing. The amount of money you invest depends on how much you can set aside comfortably every month for your systematic investment plan. Although your query suggests that you have a surplus of Rs.35,000 a month, it is a significant portion of your monthly income (more than 50%), and I would be wary of investing all of it. It would be better to keep aside some for an emergency or short-term expenses and invest the rest. An amount in the range of Rs.12,000-15,000 would be a good o get started with.

Regarding funds, Kotak Select Focus is a good fund to continue investing in. You can also consider similar funds such as Mirae Asset India Opportunities to add to your portfolio. Apart from these, a large-cap fund like ICICI Prudential Focused Blue Chip and a mid-cap fund like BNP Paribas Midcap can be added.

My husband passed away three months back and I wanted to continue with his mutual fund investments. What is the process to transfer investment units?

—Nazreen Ahmed

You can hold on to or continue the investments made by your late husband. However, you would need to first get the units transferred to your name. This is called transmission of units. All fund houses follow a uniform, well-documented process when it comes to the transmission.

The process is simpler if there is a nominee listed on the folio as the beneficiary. In this case, the nominee will have to make a written claim (a simple letter) for the units and submit it along with the death certificate. Along with this, the information required for creating a new folio in the name of the nominee, such as bank account information, Permanent Account Number (PAN) and know-your-customer (KYC) details, will be needed.

It is also possible to have multiple nominees for a folio and in such cases, each nominee will be allotted the apportioned number of units as per the intent of the original (deceased) investor.

Where a nominee is not listed, a couple of additional documents are required. A document proving the relationship of the person making the claim to the deceased and a legal heir affidavit have to be given to prove that the claim is legal and valid. If the investment amount is above the threshold (currently Rs.5 lakh), a legal heir certificate issued by a competent authorities will be required.

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