How to Claim Mutual Fund Investments After Death of Investor

Losing someone close is never easy. Along with the emotional pain, there are financial matters to handle. This can add to the stress.

If they had mutual fund investments, you have to claim them through a standard mutual fund inheritance procedure. Only a joint account holder, nominee, or legal heir can claim these investments.

The mutual fund death claim process after the death of an investor is mostly similar across cases. However, there are differences in documentation and procedure.

This guide outlines the steps that nominees and legal heirs must follow to claim mutual fund after death of the investor to make the process simple, clear, and manageable.

Claiming Mutual Fund Investments After the Death of  Mutual Fund Holder: A Complete Guide

In the event of an investor’s death, the holdings are usually transferred to the nominee or the joint holder nominated by the investor. This process is called ‘Transmission of Units.

Nishant Kohli, Co-Founder and Director, Mudra Portfolio Managers

To claim mutual fund after death of the investor, you need to gather all relevant investment details. It is also essential to keep the documents required for the mutual fund claim ready.

Here’s a step-by-step guide on how to transfer a mutual fund after death of the investor:

Step 1: Identify the Investor Details

To start the mutual fund transmission process, you must first gather key documents and information related to the investor and their investments. Here’s what you need to collect:

• PAN Number: The Permanent Account Number (PAN) helps link all mutual fund folios and holdings under a single investor identity.

• AMC (Asset Management Company) Details: The AMC manages the investor’s mutual fund portfolio. It tracks all transactions, holdings, and related communications.

• Mutual Fund Folio Numbers: This is a unique alphanumeric code assigned by an Asset Management Company (AMC). Each AMC gives a different folio number. An investor can use one folio for multiple investments within the same AMC, or have separate folios for different goals.
  

To get a complete view of the investments, you can request a Consolidated Account Statement (CAS) from the Registrar and Transfer Agents (RTAs) like CAMS or KFintech. This statement provides a summary of all mutual fund holdings linked to the investor’s PAN.

Step 2: Check for Nomination

To begin the nominee claim, the first step is to check if a nominee has been registered by the investor.

You can check nominee details online using the folio number. Alternatively, you can request this information from the Asset Management Company (AMC). The mutual fund statement indicates whether a nominee has been declared and who it is.

If a nominee is registered, the claim process is simple. They can directly claim a mutual fund after death, the investments with minimal documentation.

If there is no nominee, the investments are transferred to the legal heirs. This process is more complex and requires additional legal documents.

SEBI has partnered with DigiLocker to enable investors to store all holding statements in one place. KYC Registration Agencies (KRAs), regulated by SEBI, verify nominees and assist in asset transfers.

Investors can nominate a DigiLocker user who will be notified in the event of their death. If the nominee is listed in the Demat or mutual fund account, they can initiate the transmission directly. Otherwise, they can share details with the legal heir or account nominee to proceed.

Required Documents To Claim Mutual Fund With Nominee

To claim mutual fund after death of the investor as a nominee, you need to submit the following documents to the AMC or RTA:

• Transmission Request Form (Form T3) requesting transmission of units in favour of the nominee(s).

• Original or notarised copy of the death certificate. If the nominee is a minor, also attach a copy of the birth certificate.

• Self-attested copy of the PAN Card of the nominee or the guardian (if the nominee is a minor).

• KYC Acknowledgement or Completed KYC Form for the nominee or guardian. Transmission will only proceed once the KYC status is updated to “KYC Complied”.

• Cancelled cheque with the nominee’s name printed, or a copy of a recent (within 3 months) bank statement or passbook as a bank account proof.
  

Vinod Singh, CEO and Co-Founder of FINHAAT, explains the necessary steps to claim mutual fund investment.

If an investor who is a ‘resident individual – single holding’ is deceased, an adult nominee (claimant) can get the Mutual Fund units transferred in his/her name by submitting Form T3 to the RTAs (of the respective AMCs) or directly at the AMC branches. Alongside this application they would need to submit documents (as stated in Form T3), which includes Death Certificate, PAN Card of claimant, KYC Form, Cancelled Cheque/Bank Statement/Passbook, ID Proof of the deceased person.

Required Documents to Claim Mutual Fund Without Nominee

A legal heir can claim mutual fund units if both joint holders of the account have passed away and no nominee has been registered.

Similarly, in the case of a single-holder account without a registered nominee, the legal heir becomes eligible to claim the investments. In such situations, the process involves submitting a few additional documents to establish legal heirship.

Basic Documents Required

• Death certificate of the investor.

• PAN and KYC documents of the legal heir (identity and address proof).

• Bank proof (cancelled cheque or recent statement with name).

• Completed claim form from the AMC or RTA.

• Identity proof of the deceased.
  

Additional Documents Required

• Indemnity Bond, signed by all legal heirs.

• Each legal heir must submit an individual affidavit confirming the claim.

• Notarised copy of Succession Certificate or a probated will.

• NOC (No Objection Certificate) from other legal heirs, if applicable.
  

How to Submit the Claim

Once you’ve gathered the required documents, follow these steps to claim the mutual fund investments:

Contact the Mutual Fund House

Start by getting in touch with the Asset Management Company (AMC) where the investor held their mutual funds. If the investments are spread across multiple AMCs, you will need to contact each one individually.

Submit the Documents

Next, submit a formal request for transmission along with all the necessary documents.

Ensure the documents meet the specific requirements of each AMC. This helps avoid delays or rejection due to incomplete or incorrect paperwork.

What Happens After Claim Submission?

Once you submit all the required and valid documents, the AMC or RTA starts processing your claim. This usually takes about 10 working days.

During this time, the AMC reviews and verifies the documents. If everything is correct, the mutual fund units are either:

• Transferred to the nominee or legal heir’s folio, or.

• Redeemed, and the amount is credited to the bank account you provided.
  

How Units Are Divided

• If a will exists, the units are divided according to the instructions in the will.

• If there is no will, the units are usually divided equally among all legal heirs, as per succession laws.
  

Tips to Avoid Hassles Later

Approximately ₹323 crore is unclaimed in mutual funds, according to SEBI data. But with a few simple steps, you can make the claim process easier for your loved ones.

Here’s what you should do:

• Always add a nominee to your mutual fund investments. This ensures a smooth transfer and avoids legal issues later. 

• According to SEBI's revised guidelines, effective March 1, 2025, investors can nominate up to 10 individuals in their mutual fund folios, allowing for specific asset distribution. 

• Update nominee details after marriage, childbirth, or any significant change in family status.

• Keep a list of all your investments, mutual funds, folio numbers, AMC names, and account details. This helps your nominee or legal heir track and manage everything easily.

• Keep all important documents in a secure but accessible location. Ensure that at least one reliable family member is aware of your investments and knows where to locate the records.

• Draft a will to clearly state how you want your assets to be distributed. Update it regularly to reflect any changes.

• Update your KYC details like address, contact info, and more whenever they change. This avoids delays during the claim process.
  

While many unit holders are aware that MF transfer is possible, a majority of them are still unaware of the process and documentation that is required in the event of death. To avoid these hassles later on, investors should prepare a checklist for a smooth processing of transfer. They must ensure that the nominee has been registered for all folios, the name of the nominee is same as that on their PAN Card (or guardian in case nominee is a minor),

says Nishant Kohli, Co-Founder and Director, Mudra Portfolio Managers.

Conclusion

Proper planning and clear documentation make claiming mutual fund investments after a loved one’s death much easier and less stressful. Taking the time to update your nominations today ensures your family’s financial interests are protected. It helps avoid delays and confusion during difficult times. Review and update your mutual fund nominations now to protect your family’s future with simple steps. AssetPlus streamlines mutual fund distribution by streamlining operations, enhancing client communication, and ensuring regulatory compliance. Sign up now!

FAQs

Does the nominee automatically become the owner of mutual fund units after the death of mutual fund holder?

No. A nominee acts as a trustee or custodian, holding the units on behalf of the legal heirs. If a valid will names a different beneficiary, that person legally owns the units. However, mutual fund houses may still transfer units to the nominee per their records.

What happens to mutual fund units if one or both joint account holders pass away?

What should I do if there is no nominee or legal heir certificate for claiming mutual funds?

Are there tax implications when mutual fund units are transferred after death?

What common mistakes should I avoid when claiming mutual fund investments after the investor’s death?