An investor who had been investing in mutual funds for 40 years has suddenly passed away; who will now receive the fund worth crores?

Investing in mutual funds is a long-term endeavor, spanning years rather than just a day or two. If you invest today, you can build a substantial corpus over 40–50 years. However, investors often wonder: what happens to the accumulated funds if the investor passes away unexpectedly?

Will the money go to the nominee, the family, or the legal heir? And what is the process for withdrawing these funds? In reality, there is a specific procedure to transfer the accumulated funds to the rightful person following an investor's death; this is known as the 'Transmission of Units.' Let us understand what this entails and how it works.

What is Transmission?

Transmission refers to the process of transferring a deceased mutual fund investor's units to a nominee, a surviving joint holder, or a legal heir. The mutual fund company (AMC) cannot release funds to anyone without this transmission process taking place. The units are transferred—or the redemption proceeds released—only after this process is completed.

Crucially, the claimant must have updated KYC details. If KYC is not in order, the entire claim process will come to a halt.

What happens if the investment is held jointly?

Many people today invest through joint portfolios with their spouses, children, or other family members. In such cases, two scenarios may arise. If the second or third holder passes away, their name is removed from the folio, and the remaining holder(s) can continue the investment. Conversely, if the primary (first) holder passes away, the second holder automatically becomes the first holder.

To facilitate this, you must submit necessary documents such as the death certificate, PAN card, bank details, and KYC-related paperwork. If the claim amount is up to ₹5 lakh, signature verification by a bank manager suffices. However, for claims exceeding ₹5 lakh, signatures must be attested by a Notary Public or a Judicial Magistrate First Class (JMFC).

**The process is very simple if a nominee is registered**