We all like to save for a rainy day. Financial investments are made to provide for life goals — you could be investing to fund your children’s education, for retirement, or to meet other short-term goals like buying a home, etc. They are also made to secure your loved ones in case something were to happen to you. Whatever the reason, most families have a robust savings plan in place. But in how many families do the primary caregivers keep the other members informed about the investments they make?
It may be a good idea to list down all your investments in one place and let a close family member know about them. You could choose a diary or a digital file. But be sure to update this file at regular intervals to keep it up to date with any corrections that you may make to your portfolio. This will ensure the financial wellbeing of your family in the event of your demise. They will know exactly where your savings are and who they need to approach for a transfer.
Imagine you have it all listed down, here is how your investments can be transferred to your loved ones, if needed. Mint Deputy Editor Neil Borate explains in detail in Episode 2 of Mint Money Shots, our new personal finance explainer series.
How can I transfer assets in the event of death?
The process for the transfer of assets, specifically mutual fund units, in the event of the death of the unit holder is called transmission. The process is simple. If there are multiple holders, the units get transferred into the name of the second holder. But if there is only a single holder, the units can be transferred to the nominee or legal heir.
You can invest in a mutual fund through a broker, mutual fund distributor, or any other intermediary. In the event of the investor’s death, you need to go back to the entity through which the investment was made and inform them of the death. After this, the process of transfer in the name of the legal heirs can be initiated.
There are also cases where the family of the deceased has no idea about the investments that have been made. In this case, the process of transfer can be a lot more complicated. Here, you can take the help of two popular Registrar and Transfer Agents (RTAs) in India — CAMS and KFintech (Karvy). RTAs can help investors with KYC, documentation, and changing personal details.
What are the different steps involved in transmission?
Step 1:
To start the process of transmission, the first step is to detail all the investments made by the deceased. For this, the process becomes very simple if you have a ready list. Otherwise, the survivors must have access to the deceased’s email address or phone number. This is because OTPs are sent to the registered email address and phone number of investors on multiple occasions, and these can be used to track the investments.
To obtain the details of the mutual fund holdings of the deceased across different fund houses, the legal heirs can generate a Consolidated Account Statement (CAS) through the website of any RTA. A CAS can help in creating a consolidated list of all mutual fund investments with fund and scheme names and also list out the folio numbers of each investment.
Step 2:
In addition to the details found in CAS, the process of transmission also requires some additional information, like the names of the primary holder, joint holder, and nominee for each investment, along with details of the linked bank account. In case the family is not aware of these details, they would need to be tracked. For this, they can use the PAN card of the deceased along with the email address or phone number to individually visit the websites of each fund house in which the investments have been made and procure these details.
There have also been instances where the families don’t have access to the email or phone number. In such cases, the process becomes longer. First, the family needs to visit the nearest CAMS or KFintech service centre. They must carry the PAN card and death certificate of the deceased. They may also be required to furnish some proof that they are the legal nominees or survivors of the deceased. On visiting the service centre, they will be able to not only procure the details of investments but will also be provided with the forms that need to be filled and submitted for the transmission of mutual fund investments.
Step 3:
The next step is to visit the CAMS or KFintech websites and download the necessary forms from the ‘transmission’ sections. The survivors must then prepare a file of all filled-out forms and supporting documents for each fund house. It is important to keep in mind the quantum of investments, as the list of supporting documents differs depending on the size of the investment and the joint holders/nominees appointed by the deceased.
While the filled-out form and original death certificate, or a copy of the attested death certificate, are required for all transmissions, some further supporting documentation may also be required depending on the situation. This could include a bank mandate, a cancelled cheque, or the PAN card of the joint holders/nominees.
They would need to prepare a separate docket containing the transmission form and supporting documents for each fund house, which will be submitted at the nearest CAMS or KFintech service centre. Once the documentation has been accepted, you can expect the fund house to process your request for transfer in five to 10 working days.
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Published: 07 Jun 2024, 04:42 PM IST