a) Transfer of mutual funds is a grey area since as per the Securities and Exchange Board of India’s (SEBI) regulations, 1996, transfer of mutual fund units is allowed. So the concept of gifting mutual fund units also is a hypothetical one and is practically not possible.
Do mutual funds have a beneficiary?
Mutual fund accounts allow owners to name beneficiaries—in the event of the owner’s death. Mutual fund owners can set up a transfer-on-death (TOD) provision whereby the fund’s assets would transfer to the beneficiary.
Can I transfer a mutual fund to another person?
Units of a mutual fund cannot be transferred from one holder to another, nor can they be gifted by one person to another. Mutual funds are also not allowed to accept ‘third-party’ payments—meaning, you cannot use money from your wife’s bank account to make investments in your name.
Who is the legal heir of a mutual fund?
The legal heir to the mutual fund investment is free to claim the folios against the nominee. A couple of years back, the Bombay High Court gave some judgments on ‘nominee versus legal heir’ in a case that involved the ownership of equity shares. The Court said that in India a nomination cannot override the laws of succession.
Who is the legal heir of an EPF account?
When you open an EPF account, you have to make a nomination. This nominee that you provide will inherit the money from the fund. The legal heir will have no right on it. As per the EPF rules, you need to appoint a family member as the nominee. The nominee will only get custody of the PPF amount.
Who is chip Stapleton and what are mutual funds?
Chip Stapleton is a Financial Analyst, Angel Investor, and former Financial Planner & Business Advisor of 7+ years. He currently holds a Series 7, and Series 66 licenses. A mutual fund is a type of investment product where the funds of many investors are pooled into an investment product.
Can a mutual fund be opened as an individual?
A mutual fund account can also be opened as an individually owned account, and the owner can name one or more beneficiaries using a TOD registration. The owner maintains control over the account during his lifetime.
