While mutual funds are a popular investment motive, it is critical to understand a few nuances before getting into any monetary deal. Before you invest in any fund, make sure to have acquired complete knowledge about the particular fund so as to safeguard your investments from any impromptu decisions of acquiring a debt like a home loan or a personal loan etc to finance one’s requirements. Investments in mutual funds can be done either individually, i.e., in a single name or with three people, i.e., in a joint mode. Thus, your mode of holding the mutual fund units can be anyone or in the survivor mode, or in the joint mode. In the unfortunate event of the demise of any one of the joint unit holders, the following situations may arise:
A) In the event of the death of the first unit holder, the mutual fund units are automatically transmitted to the second unit holder. For this purpose, the following documents may be required by the mutual fund house for processing and verification of the mutual fund units for transmission.
(i) Certified copy of the death certificate of the first unit holder
(ii) PAN card details, address and other relevant documents of the second unit holder
(iii) Letter from the other surviving unit holders indicating the death of the first unit holder
B) In case the funds have been registered in the name of a single unit holder, it is important to nominate a person for claiming funds in the event of the death of the single unit holder. The claimant is required to forward an application in order to make a claim, along with certain certified documents like:
(i) A copy of an authorized statement of account as provided by the Asset Management Company
(ii) Documents that provide proof of identity of the nominee such as passport, driver’ s license and so on
(iii) The nominee is also required to make a declaration against any other such claims
C) In the event of the demise of a single unit holder of mutual funds, without the declaration of a nominee for claiming funds, it may be slightly complicated and tedious for the process of receiving funds. When there is a single holder and he/she has not declared any nomination, but has left a will, then the claim can be demanded by the claimant mentioned in the will. For this purpose, an application by the claimant in the event of the demise of the first unit holder, along with an attested copy of the will must be appropriated with the following documents:
(i) Certified copy of statement as forwarded by the Asset Management Company
(ii) A notarized affidavit as provided by witnesses
(iii) An attested copy of the death certificate of the first unit holder
(iv) The claimant is required to make a declaration against any other such claims
(v) A declaration in the will that states that such a will is the final binding document and that there are no other claimants
D) In the event of the demise of the joint holder of the mutual fund units, who is not the first unit holder, the units of the mutual fund will continue to live in the name of the first unit holder. The first unit holder also holds the power to register any other person as a joint holder of the mutual fund units, the process of which requires the following documents:
(i) A certified copy of the death certificate of the joint holder of mutual fund units as provided by the Asset Management Company or bankers
(ii) Letter from the other surviving joint unit holders of the mutual fund indicating the death of the joint holder
(iii) Name, signature of the second holder, PAN card and other documents in the event of the registration of a new card holder.