Have You Chosen Your Nominee in Mutual Fund Investment!

An investor can nominate a person called nominee to whom his Mutual Fund Units will be transferred on his / her demise. Mutual Fund Units get transferred to the nominee registered in the folio on the demise of the Investor.

Nomination is now mandatory for new folios/accounts opened by an individual especially with sole holding and no new folios/accounts for individuals in single holding would be opened without nomination.

Also refer

Where to see my Nominee Details in Mutual Fund Account Statements??

However, investors who do not wish to nominate must sign separately confirming their non-intention to nominate. Investor who don't want to mentioned nominee details need to sign declaration for not exercising the right of nomination in respect of units held by him/her.

 Registering a nomination facilitates easy transfer of Funds to the nominee on the unfortunate demise of the investor. In the absence of the nominee, a claimant would have to produce a host of documents like a Will, Legal Heir ship Certificate, No-objection Certificate from other legal heirs etc. to get the units transferred. The process is simple if a nominee is registered in the folio.

 
Nomination ensures all rights and /or amount(s) payable in respect of the holdings in Schemes of Mutual Fund would vest in and be transferred to the nominee upon death of the Unit holder. The nominee receives the units only as agent and trustee for the legal heirs or legatees as the case may be. Investors should opt for the nomination facility to avoid hassles and inconveniences in case of unforeseen events in future. 

Terms and conditions related to Nomination

 The nomination can be made only by individuals applying for / holding units on their own behalf singly or jointly.    In case a folio has joint holders, all joint holders should sign the request for nomination/cancellation of nomination, even if the mode of holding is not "joint". 
 

Every new nomination for a folio/account will overwrite the existing nomination.

An investor may make up to three nominations and even specify the percentage of the amounts that will go to the nominee. If the percentage is not specified, equal shares will go to the nominees.

A minor can be nominated and in that event, the name and address of the guardian of the minor nominee shall be provided by the unit holder.


Nomination form:

Revised Process related to Minor Investment , Nomination , Transmission

This is with reference to Addendum 98, following are process & document related changes applicable w.e.f. 1st April,2011.
Summary points:
Minor Investment -
 No joint Holding allowed in Investment on behalf of Minor
Only natural Guardian ( Father/Mother /Court appointed Legal Guardian ) allowed.
Birth date proof to be submitted alongwith application. Documents like Birthcertificate , School leaving certificate ,passport copy, Anyother proof evidencing Date of Birth
In case of Court appointed Guardian , supporting documentary evidence required.

Minor Attaining Majority -
Minor to submit application to transfer folio in his own name once he becomes major,
Guardian can not undertake any txn (including SIP ,STP ,SWP) once minor become major.

Change in Guardian
Change of Guardian is possible either due to Mutual Consent or demise of existing Guardian.
Documents to be submitted are (1) Request letter from new Guardian (2) No objection letter /consent letter from existing guardian if alive
Notarized copy of Death certificate of deceased guardian

Nomination Mandatory -
Nomination shall be mandatory for all new folios
Nomination will be at folio level and shall be applicable to all schemes
All joint holder to sign nomination form
Nomination shall not be allowed in Folio held on behalf of Minor
In case Investor does not want to update nominee details , written confirmation to that effect from Investor will be required.


Also refer:

Procedure for Transmission - Change in Guardian due to demise of Existing Guardian