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If a family member suddenly leaves this world, it is sad, but amidst that pain, another challenge comes up - what will happen to his money and investments? Especially things like mutual funds, about which not everyone is aware. Have you ever wondered what happens to someone's mutual funds if he dies? Does the money get stuck just like that or can the family members easily claim it? Does having a nominee get the work done quickly or does one have to get stuck in a legal process?

If someone in your family has mutual funds in their name or you have invested yourself, then this information is very important for you. Here we will tell who can claim mutual funds after the death of the investor, what is the process, what documents are required and what things you should keep in mind regarding tax.

Three types of people have the right to claim mutual funds

After investing in mutual funds, it is important that investors also ensure that their money reaches the right hands in their absence. For this, it is important to know to whom and how the mutual fund is transferred. If the mutual fund is in a joint account and on updating the death of the first holder, the investment automatically gets transferred to the remaining holders. But if all the account holders die and there is a nominee, then the fund is transferred to that nominee. If there is no nominee, then this investment is transferred to the legal heirs. On the other hand, if the account was in the name of a single person, then the fund will be given to him if there is a nominee. In the event of no nominee, the legal heirs will be entitled to the fund. If there is more than one nominee or heir, the investment will be divided as per the share given in the enrollment document.

For a mutual fund claim, first contact the fund house

To claim a mutual fund, first contact the concerned fund house. The nominee, joint account holder or legal heir should talk to the mutual fund company in which the deceased had invested. After this, necessary documents have to be submitted. Such as transmission request form, death certificate of the deceased, Aadhaar and PAN card of the claimant, bank details. If the legal heir is claiming, they additionally need indemnity bond, personal affidavit and valid will or succession certificate. If the nominee is a minor, then his birth certificate and KYC documents of the guardian also have to be given.

No capital gain tax on mutual fund transfer

Talking about tax, there is no capital gain tax on mutual fund transfer. But if those units are sold later or dividends are received, then tax may be levied on it. Therefore, it is very important to keep the nominee's information correct while investing and tell the details of the investment to the family, so that no problem is faced in the future and their financial future is secure.