Sujoy Sinin, a businessman from Ranchi, has a Mutual Dana (MF) investment in physical form, with his wife Apeksha Sinin as the sole candidate. Unfortunately, both of them were Covid victims and died in two weeks. After death (without making a will), their two daughters (both are married) Vibhuti Gujral (older, settled in Delhi) and Prameela Kathpalia (settled in Australia), began the process of taking assets, as heirs of legal law.
For MF investment, they follow the transmission process stated on the Indian Mutual Fund Association website (AMFI: Mutual Fund Industry Agency). The transmission process is different based on your investment value: up to RS 2 Lakh or above Hospital 2 Lakh.
For investment valuable up to RS 2 LAKH, no succession certificate is needed. This is a document that a competent court issued a legal heir and it indicates and declares legitimate people to become the successor of the person who died. This is a general certificate and is needed for all immovable assets. This forms basic documents by the prosecutor or heir. It was also required by the heirs of the law when someone died without will.
With any supporting documents he can get, Vibhuti approaches the home of individual funds, sending a copy of his parents’ death certificate and your supporting documents who know themselves (KYC), which will make it a prosecutor. He also filed an endorsement of the bank for his signature and signed a written statement and compensation with guarantee, and a NOC from his younger sister.
The first obstacle investor such as Vibhuti Face is this: There is no fund house that has clarity whether the ceiling of RS 2 Lakh is applied to investments owned by PAN cards or per folio (from investors who die).
This is important because you might have investment in various houses with the same PAN card. Investment in various houses has a different folio. However, if the Lakh 2 RS limit is applied per pan, then the limit is too low and will not apply to most old investors, which will from time to time, easily cross this limit in their overall MF investment.
AMFI guidelines: Room for interpretation
When Vibhuti approached 10 houses that hold his father’s investment, he reached the first obstacle. AMFI Guidelines on Asset Transmission (Transfer Assets In the event of death, to the heirs of the law) are general guidelines and allow houses to spend them with their own additional requirements.
For example, the heirs of the law must first know the existing folio status, their account statement, and the latest assessment report to ascertain whether the value of ownership up to RS 2 LAKH or above Hospital 2 LAKH. Vibhuti did not get this detail from many houses of funds holding her father’s money. Incidentally, the succession certificate, which is needed by the Dana House to start the transmission process without a will, also requires this detail, if the investment value is above Hospital 2 Lakh. Initially, several Dana Houses worked with him in the front; mostly not. Strange case ‘all heirs of law vs other laws and heirs
One of the clauses in the best practice guidelines for AMFI regarding transmission said that if the single holder or the two joint holders died without leaving a will or nomination, then the heir of law must submit the Appendix II form (compensation bonds), and Appendix III Form (written statement) by all the heirs of the law.
This guideline is the most relevant where there is no will of the deceased. So, in the case of Hindu succession laws, a man who died may have a legal heir, such as mother, his wife, and, say, two children. The four are considered as legal heirs (in the absence of will or nomination) in the same ratio and therefore the four heirs who are still alive must submit the Appendix II form (compensation bonds), and the form of appendix III (a written statement).