On death of the unit holder, can the nominee get the amount in mutual funds of the deceased person by credit to his bank account? If no, why and if a new folio is to be opened by the nominee, will the applicable exit load be charged while transferring the units or will it be waived in case of death? Also, what will happen to the zero balance folio of the deceased unit holder? Is it closed or will it continue in the books even after his death?
—Nilesh Sathe
On the death of the unit holder, the units in the holding(s) can be transmitted to the nominee. The nominee will need to produce a death certificate for the deceased and prove her identity with an endorsement from her bank. The nominee would also need to fulfil KYC requirements as well (with her PAN card and address proof). Once these steps are completed, the AMC would transmit the units to be in the name of the nominee.
And once the units are in the name of the nominee, she can act on the folio as she wishes. That is, she can redeem these and get the money in her bank account. Unless, of course, the units are in a lock-in period (for a tax-saving fund, for example) or it is a closed-ended fund that still has some investment period left in it.
