Investments such as stocks, bonds and mutual fund units, held in the name of a deceased investor, is transferred to persons entitled to receive them through the process of transmission.
If the investment is held jointly, then it passes on to the second holder on death of the first holder. If there is a nomination but no joint holder, it passes on to the nominee.
The nominee or joint holder needs to make an application for transmission to the mutual fund that issued the units, the depository where the demat account of the deceased investor is maintained or to the company that issued the shares and bonds held in physical form, as the case may be, along with some documents. The documents include a copy of the death certificate duly attested by a notary public or gazette officer. The claimant needs to attach a self-attested copy of her PAN card, bank details attested by the bank manager or cancelled cheque with her name as the account holder and account number and documents establishing that she has completed KYC formalities. In case of demat holdings, the client ID of the deceased person and the claimant’s depository participant ID will also be required.
Read: Caring for family after you are no more
If the legal heirs of the deceased dispute the transfer to the nominee, the investments will be held in trust by the nominee till the dispute is resolved.
If there are no joint holders or nominees, the investments are transferred to the legal heirs of the deceased when their application for transmission is supported by prescribed legal documents.
Read: Why it’s essential to make a Will
If there is a valid Will, then the claim can be made by the persons entitled to receive the investments. In the absence of a Will, the claim can be made on the basis of a succession certificate that has to be obtained from the court to identify the legal heirs. Other documents that can be used to stake a legal claim include letter of administration issued by a court and a court decree. The claimant(s) must provide affidavits to enable identification as legal heirs and establish their claim to ownership of the investments.
Read: How to file ITR of deceased, surrender PAN and Aadhaar
If the value of the investment involved in the transmission request is up to the threshold specified (currently it is ₹ 2 lakh for many investments), and there is no Will or succession certificate or other suggested legal documents to support the claim, then the transmission may still be done on the basis of any official document that can prove the relation between the claimant and the deceased. Also, a no-objection certificate (NOC) to the transmission from all other legal heirs, along with an indemnity bond indemnifying the issuer of the securities, mutual fund or depository, will be required. If the value of the securities is greater than the threshold limit then a succession certificate, Will, probate of Will or letter of administration or court decree has to be provided.
Read: Inheriting a property is not enough, proper transfer of its title in your name is a must
There are standard formats for the applications, affidavits and other submissions and these are readily available on the websites of mutual fund companies and depositories