How to Claim Mutual Fund Investments After Death

Losing a loved one is difficult, and dealing with financial matters in such times can add to the challenges. One of the key financial aspects to take care of is the deceased's investments, including mutual funds.

After the death of the investor, there are various provisions to ensure a smooth and seamless investment claim process for eligible claimants. In this blog, we'll discuss what happens to mutual funds after death of the investor and how nominees can claim the investments.

Who can claim mutual funds after death?

Upon the death of an investor, the following individuals are eligible for transmission of units in their name-

• Joint account holders: The surviving joint account holder(s) can claim the funds.
• Nominees: The person designated by the investor to receive the investment upon their death.
• Legal heirs: If no nominee is designated, the legal heirs of the deceased can claim the mutual funds. The legal heir is determined through a will or legal succession laws.

Different transfer scenarios

While transferring mutual funds after death is straightforward, there are some key differences in the process and documentation based on the type of claimant and the mutual fund holding.

1. For joint account holders or nominees

For joint account investments, there can be 3 joint holders, and the following three types of claims are possible-

• Upon the death of the first holder, the investment is transferred to the survivors.
• If all investors are deceased, the nominee can claim the investment.
• If all investors are deceased without nominees, the investment is transferred to the legal heir.

2. For sole accounts

In case of a sole account, here's how to transfer mutual funds to nominee after death-

• If there is a registered nominee, mutual funds will transfer to them.
• Without a nominee, the investment will be transferred to legal heirs.

If there are multiple nominees or legal heirs, the investment is divided between the claimants based on the percentage share mentioned in the nomination documents.

If multiple legal heirs submit a joint claim, the investment is divided as per the will. But in the absence of a will, all legal heirs can claim an equal share of the investment.

How to claim Mutual funds after death?

Let's see how to claim mutual funds after death online for all investors -

1. Contact the mutual fund house

After the investor's death, a nominee, joint account holder or legal heir must contact the fund house where the deceased held the investments. If the investment is spread across several folios, claimants must contact the respective fund houses.

2. Submit the documents

The claimant must submit a formal request for transmission, along with the necessary documents, which include-

Upon verification and approval, the investment can be divided among the nominees or heirs.

3. Tax implications

Upon transfer of mutual funds after death, it is important to understand the tax implications. The transmission of mutual funds to the claimant does not carry any capital gains tax. However, any financial gains from the sale of the units or dividends are subject to existing tax laws.

Conclusion

Investing in mutual funds is an excellent way to secure your loved one's financial future. However, as an investor, it is just as important that your loved ones can easily reap the benefits of the investment through a seamless transfer process.

Need help investing in mutual funds? Explore Tata Capital Moneyfy's app or website for expert guidance.