Mutual Fund – Mutual funds are one of the popular investment options for investors. It is not only a great way to build a large fund but also an effective means to meet financial goals in the long term. But do you know what will happen to the funds if the person investing in a mutual fund dies suddenly? How can this money be claimed or does it get stuck?
Investing in Mutual Funds and the Importance of Nomination
In mutual funds too, investors are given the option to appoint a nominee like other options. So that when the investor dies, the nominee can be entitled to receive that fund. If you have appointed a nominee while investing in a mutual fund, then the process of claim becomes quite simple. The nominee has the right to receive the amount of the mutual fund, but what will happen when the mutual fund investor has not appointed a nominee?
What happens to the money of a mutual fund investor in case of his sudden death? Know the complete process and important information.
What will happen if a nominee is not made in the mutual fund account?
If the investor does not appoint a nominee, then the process of claim after his death becomes quite complicated. However, even in this situation the money does not get stuck. In such a situation, the amount of the mutual fund can be claimed by the legal heirs of the investor.
The heirs will need these documents
– Death certificate,
– Succession certificate or will, if available,
– Identification card of the legal heir,
– Address proof
– Mutual fund folio number and other related information.
Process to claim money after the death of a mutual fund investor
1. First of all, inform the concerned mutual fund company about the death of the investor. This can be done by the nominee or heir.
2. The nominee has to submit all the necessary documents of the investor. Which will include death certificate, KYC documents, and folio number. A claim form has to be submitted along with this. If the investor has not selected a nominee, then all the necessary documents have to be submitted by the heirs. For this, a succession certificate or the investor’s will will be required.
3. The mutual fund company transfers the fund to the name of the nominee or legal heir after checking the documents.
4. After transmission, the nominee or heir can redeem the fund.
Also know the difference between nominee and will
Many people consider nominee and will to be the same. But there is a big difference between the two. If the investor appoints a nominee, he will be just like a trustee who will have the right to receive the mutual fund amount and distribute it as per the will or legal heirs. If the investor has made a will, then the money will be distributed as per the instructions mentioned in it.