How can a nominee claim mutual fund investments?

Death is difficult. But dealing with financial paperwork in the middle of that grief can make it even harder.

And yet, this is the moment when clarity matters most, especially if you're the nominee for someone's mutual fund investments.

Fortunately, mutual fund houses have created a standard, structured process to help nominees claim the investments without unnecessary complications.

But you need to know exactly what to do. Because even a small mistake, an incomplete form, a missing document or a lack of KYC, can stall the entire process.

This article lays out everything you need to know: the step-by-step process, what documents to submit and what happens if there's no nominee or if a Will enters the picture.

Step-by-step: How a nominee can claim mutual fund units

1. Fill out the transmission request form (Form T3): This is the key document that initiates the process. You can download Form T3 from the AMFI website.

2. Submit the death certificate: Submit a self-attested copy, notarised copy of the deceased's death certificate. If the nominee is a minor, a copy of the birth certificate may be required.

3. Provide identity and bank proof: The nominee needs to submit a self-attested copy of their PAN card, a cancelled cheque with the nominee's name pre-printed, or a recent bank statement or passbook (not older than 3 months) and KYC acknowledgement or a filled KYC form (if not already KYC-compliant).

4. Signature attestation based on claim size: Depending on the amount claimed, signature attestation is required:

• For claims up to Rs 5 lakh: Signature attestation by the bank manager is typically accepted. If the nominee is a minor, the guardian's signature must be attested instead.
  
• For claims above Rs 5 lakh: Attestation is usually required from a Notary Public or Judicial Magistrate First Class (JMFC). Some AMCs may accept attestation by a bank official. You can check with the fund house.

5. Additional documents
These may include: A self-attested copy of the identity proof of the deceased (for example: PAN, Aadhaar, passport, voter ID). If the nominee is a minor, the guardian must act on their behalf and submit their own KYC and ID documents.

Once all documents are verified and KYC compliance is established, the mutual fund units will be transmitted to the nominee. From that point, the nominee becomes the new unitholder and can carry out transactions like redemption or switching.

What if there are multiple unitholders?

It's important to note that if there are multiple unitholders, the nominee will not have any claim on the investments as long as one of the unitholders is alive. In such cases, the mutual fund units automatically pass on to the surviving unitholder, and the nominee's right arises only after the death of all unit holders.

What if there's no nominee?

When a mutual fund investor passes away without naming a nominee, the process of claiming the investments becomes more complex. The fund house requires proof of legal heirship, and the documentation depends on the value of the claim.

Required documents typically include:

• Death certificate of the investor
  
• PAN and KYC details of the claimant
  
• Bank proof of the claimant
  
• Identity proof of the deceased

Based on the value of the claim:

• Up to Rs 5 lakh: Signature attestation by the bank, Proof of relationship, NOC from other legal heirs, Indemnity bond, Affidavit of heirship
  
• Above Rs 5 lakh: Signature attestation by a notary or magistrate. You Will also need to submit legal documents such as Registered Will and Legal heirship certificate.
  
• For claims above Rs 10 lakh: A probated Will or succession certificate is often necessary.

Nominee vs legal heir: What if there's a Will?

Many investors assume that the nominee automatically becomes the owner of mutual fund units. But that's not always the case.

A nominee is not the legal heir — they are simply a trustee or custodian of the investment, who receives the units on behalf of the actual beneficiary. If the deceased had a valid Will that names someone else as the rightful heir, that person has the legal right to the investments.

That said, mutual fund houses may still transfer the units to the nominee, as per their records. If there's a conflict between the nominee and the legal heir named in a Will, the matter may need to be resolved legally in a court.

Investor takeaway: To avoid future disputes, make sure your nominations and your Will are aligned. A mismatch can lead to delays, legal hassles and potential friction among heirs.

Final thoughts

To make life easier for your family, do two things:

• Register a nominee in all your folios
  
• Update your Will to reflect your intended beneficiaries

If you're unsure about any part of the claim process, don't hesitate to reach out to the mutual fund house or your distributor for guidance.

Also read: Update your nominee or get frozen out

This article was originally published on May 19, 2025.