Transfer of shares of a deceased person is not too difficult if there is a will, but, otherwise it can be a tricky affair to get shares transferred to the rightful legal heir.
1. In the case when sole-holder of the demat account passes away and the account has a nominee:
The appointed nominee of the account needs to furnish certified true copy of the death certificate of the deceased.
2. In the case where the sole holder of the demat account dies and there is no appointed nominee:
The following documents specified below are to be deposited by the claimant.
a) Certified true copy of the death certificate
b) Any of the 3 documents :
- Legal heir or succession certificate
- Letter of Administration
- Copy of probated will
3. In the case when the claimant fails to furnish either of the documents and market value of securities held in the demat account of the deceased on the application date for transmission is less than Rs. 1Lakh. The following documents are required to be furnished.
- Transmission request form (TRF) in Annexure 'O'
- Notarised copy of the death certificate of the deceased demat account holder
- NoC or no object certificate from all other legal heirs who do not object in the transmission or a notarised family settlement deed
- Letter of Indemnity on proper non-judicial stamp paper
- Affidavit on non-judicial stamp paper
The transmission of shares is effected only after careful validation of the documents by the depository participant furnished by the legal heir or claimant.
How long it takes to transfer shares of the dead person?
Once the documents are submitted to the depositories, they would have their departments scrutinize them for adherence to the guidelines. Remember, that such transfer of shares can be tricky, given that any legal heir may stake claims.
It should take about 14 days. After that the dead's persons demat account would be closed and all such shares transferred to the rightful legal heir.
Transmission of shares of the deceased and not transfer
Actually, you cannot transfer the shares of a dead person. A transfer has to be an act that is voluntary. How can a dead person conduct a voluntary act?
Hence, the right term used is transmission of shares. Transmission happens on the death of a person and in all such cases, it is the law that applies and not a person's will.We have mentioned transfer of shares for the sake of simplicity.