How To Transfer Mutual Fund Units Or SIP Units On The Death Of The First Holder?

Equity Mutual Funds have been generating tremendous investment interest over the last 2-3 years. In fact, SIP investments hit a record investment last month. It therefore becomes imperative for us to also understand how to transmit these units to the nominee or the second holder on the death of the mutual fund unit holder.

Now there could be many circumstances in which the transfer can take place upon demise. One is when there is a second unit holder, and the other is when there is a nominee. There are also instances when both the above would not apply, which means the third case would be when there are non of the above and the legal heirs come into the picture. We are just taking two of the cases above.

1) How to transfer mutual fund units in case there is a second surviving unit holder

In case there is a second unit holder then obviously the units need to be transferred to such a person. For the purpose you need to make a request for the transmission with the transmission request form. The following would also be needed:

Death Certificate of the deceased unitholder (s) in original OR photocopy duly attested by a Notary Public or a Gazetted Officer.

Copy of PAN Card of the Surviving Joint Holder(s) (if PAN is not provided already)

Cancelled cheque of the new first unitholder, with the claimant's name pre-printed OR Recent Bank Statement/Passbook (not more than 3 months old) of the new first holder.

KYC Acknowledgment OR KYC Form of the surviving unit holder(s), if not KYC compliant.

2) Transmission of mutual fund units to the nominee in case there are no other holders

In this case one has to seek the transmission request form for Transmission of Units in favour of the Nominee(s). Apart from this the following would be required:

1. Death Certificate of the deceased unitholder(s) in original OR photocopy duly attested by a Notary Public or a Gazetted Officer.

2. Copy of Birth Certificate, in case the Nominee is a minor.

3. Copy of PAN Card of the Nominee(s) / Guardian (in case the Nominee is a minor)

4. KYC Acknowledgment OR KYC Form of the Nominee(s) / Guardian (where Nominee is a Minor)

5. Cancelled cheque with the Nominee's name pre-printed OR Copy of the Nominee's recent Bank Statement/Passbook (which is not more than 3 months old)

6. If the transmission amount is upto Rs 2 Lakh, nominee's signature attested by the Bank Manager. In case the Nominee is a Minor, signature of the Guardian (as per the bank account of the Minor or the joint account of the Minor with the Guardian) shall be attested. If the transmission amount is for more than Rs 2 Lakh, as an operational risk mitigation measure, signature of the Nominee shall be attested by a Notary Public or a Judicial Magistrate First Class (JMFC) in the space provided for signature attestation in the TRF itself below the signature of the claimant.

Some of the information herein is picked from the Association of Mutual Funds In India.