Listen to this article
While the industry has a set of guidelines to deal with transmission of MF units on death of investors, there are instances where such a transmission cannot be possible due to practical issues and complexities.
Team Cafemutual has listed three practical problems and spoke to a few MFDs who have resolved these issues to ensure seamless transmission of MF units. Let us look at them:
Problem: Deceased person did not file any nomination
Resolution: Legal heirs need to obtain indemnity bond
Sandeep Gandhi of Rajkot handheld legal heirs of a deceased investor to complete formalities related to indemnity bond. MFDs can obtain format of indemnity bond from the respective AMCs.
If investment proceeds of the deceased is over Rs.2 lakh, legal heirs will have to file a court decree with a lawyer. Basically, it is obtaining ‘No objection certificate’ from other legal heirs in the favour of claimants. The next step is to obtain a certificate in the favour of claimants from the court to make transmission of units.
Sandeep told Cafemutual that the entire process takes between 3 months and 1 year.
Problem: Nominee did not know about all mutual fund investments
Resolution: Scan bank account statements and email IDs of deceased
A woman approached Belgaum MFD Preeti Kalburgi to know about investment details of her deceased husband. She did not have any idea about her husband’s investments.
Preeti sat down with the woman and scanned deceased husband’s bank account statements and email IDs. They made a note of investment and contacted eight fund houses to confirm if the deceased had invested with them.
The woman submitted the death certificate and PAN of the deceased along with identity proof of his wife to know about investment details.
Problem: Name mismatch in the death certificate and identity proof
Resolution: Make an affidavit with the help of a lawyer
Goa MFD Mumtaz Shaikh met legal heirs of a deceased person where name in the death certificate does not match PAN and Aadhaar of the deceased. However, it matched with the name appearing on the passport, which had expired.
The heirs obtained identity card issued by Gram Panchayat but the MF industry did not accept it.
In such a scenario, MFDs should tell their clients to make an affidavit in consultation with a lawyer. Once they obtain a confirmation from the court, they can proceed for transmission of units.
