Is successive nomination possible in mutual funds? | Value Research Read on to understand the meaning of successive nomination and if it is permitted in the context of mutual funds
Ask Value Research

Is successive nomination possible in mutual funds?

Read on to understand the meaning of successive nomination and if it is permitted in the context of mutual funds

Is successive nomination permitted in mutual funds? What I mean is: If A is the nominee, on his demise, B will be the nominee and so on. - RP Sood.

Nomination is an easy facility that enables you to pass on the investments to your loved ones in case of an occurrence of an unfortunate incident with the investor. Nomination makes the process of transmitting mutual funds easier otherwise it can be tedious. We got a query from one of our readers if mutual funds allow successive nomination.

But first, let's understand what successive nomination is. Suppose A is the unitholder of a fund. He has B as his nominee and C as the successive nominee. At the time of claim or death of A, the units are to be transferred to B, and if B is not available, it is to be transferred to C. Remember, this is one single instruction. Unfortunately, there is no option for that as of now in mutual funds.

But it can be done through a will. The main investor A can mention scenarios in the same will. After the death of A, the units should be transferred to B. If B is unavailable, then to C. If C is also not available, then to a different person.

If you want to reduce the hassle, you can also go for a joint account, where A and B can be joint holders and C can be a nominee. If A passes away, then B who is the second joint holder can claim the units. The nomination of C will still be intact. After B's demise, C can claim the units.

Through nomination, you can make the life easy for your loved ones in your absence. It is not mandatory, but highly desirable.

Suggested read:

Passing the baton

What to do when a joint holder in a mutual fund passes away?

Have a different question in mind? Ask us


Recommended Stories

Other Categories