In the event of the death of the mutual fund unit holder, proceeds of the investment can be claimed either by the joint holder in the mutual fund folio or legal heir. The process is referred as transmission.
And there can be 3 different cases in the situation:
1. Transmission to the surviving joint holder
2. Transmission in a case when the nominee is registered
3. Death of sole or all unit holders where the nominee is not registered
Process to claim proceeds from mutual fund investment
The nominee or legal heir is required to submit all the necessary documents together with the request letter for transmission of units to the AMC. In case the investor maintained folios across mutual fund houses, each of the company needs to be approached separately for the transmission. Else in a scenario when all of the folios are from the same mutual fund company and are maintained in a similar mode of holding, a single letter will be enough to make the claim request.
Documents required for transmission
1. Original or attested copy of death certificate of the dead MF account holder
2. Letter requesting transmission of units in the format specified by the AMC
3. KYC of surviving unit holder/holders or nominee or legal heir
4. New bank mandate in the specified format with a cancelled cheque having account number and claimant's name on the cheque or attestation by the bank branch manager or bank account statement. Note bank mandate has to be furnished on the letter head of the bank and if in case it is given on a plain paper it should include a bank branch seal, employee name and number seal.
5. FATCA self certification
In case there is no nominee added during the mutual fund investment process, claim request will be entertained by further providing 2 more legal documents including indemnity bond that needs to be signed by all the legal heirs and gives confirmation with regard to claimant. Also legal heirs need to furnish affidavit individually.
Also when the claim amount happens to more than some specified hurdle limit, succession certificate from a competent court or letter of administration or copy of probated will is required.
Time taken in the transmission of units to claimant
After all the required documents and request letter for transmission of units is submitted with the AMC, the process usually takes up to 15 days time.
Few other things to note
If the claimant is a minor person then all of the above specified documents of the guardian will be accepted for the claim
It is important to note that while you specify nominee in your mutual fund investments, name and other details should tally with the concerned person's ID records.
Make sure to acquaint nominee of the investments as else they will lie unclaimed when mutual fund sole account holder dies.