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How to nominate someone to reduce hassles of legal heirs during transmission of securities

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Many people either don’t give much importance to providing nominee details or just forget to nominate while filling investment forms offline or online. Some investors – after providing nomination details while investing – fail to update the information or change the nominee after marriage or demise of the original nominee.

Now-a-days, many people use a demat account to invest in various financial securities. In such a case, providing nomination details in the demat account would work for all the securities acquired through the demat account.



However, not providing nomination details in the demat account would create problems for the financial dependent(s) during transmission of the securities after the demise of the investor as separate applications for transmission have to be submitted for each security along with all the documents needed to prove the right and preference as a legal heir.



What should you do?

Check whether you have given nominee(s) information in your demat account or not.

How to check?

Check the Client Master Report of your demat account or Consolidated Account Statement in which the name of nominee(s) are mentioned. If you have already given nominee information and it is properly recorded in your account, then you need not to do anything more. If it is not given or you want any update in the given information, you have to fill up and submit the Nomination form to your depository participant (DP).

Why is nomination in your demat account so important?

Having nominees in demat account helps in the unfortunate situation, when demat account holders are no more. If you are the sole or only holder in a demat account then mentioning nominee(s) helps in the transmission process. You can mention up to three nominees in a demat account.

What is transmission?

Transmission is the process of law by which securities belonging to a deceased account holder are transferred to the surviving joint holder(s) or legal heir(s) or nominee(s) of the deceased account holder.

For transmission in the favour of the nominee in the event of death of single holder or all the joint holders, the following documents are necessary –

  1. Transmission Form
  2. Copy of Death Certificate duly attested by a Notary Public or Gazetted Officer
  3. In case the account of the claimant is not with the Participant, copy of Client Master Report of the account of the nominee

When no nominee is there and value of securities is Rs 5 lakh or less, after the death of one of the joint holders, the surviving joint holder(s) need to submit the following documents –

  1. Transmission Form
  2. Copy of Death Certificate duly attested by a Notary Public or Gazetted Officer.

When no nominee is there and value of securities is Rs 5 lakh or less, after the death of the single holder or all the joint holders, apart from the above documents, the Legal Heir need to submit –

  1. Indemnity
  2. Affidavit
  3. No objection certificate or family settlement deed
  4. In case the value of securities exceeds Rs 5 lakh, the legal heir also need to submit – Succession Certificate or Letter of Administration or Probate of the Will.

So, nomination is a critical activity, which a lot of us miss out on. This may create a lot of unwanted hassles for our nearest ones as transmission can be a time taking and costly process, if there is no joint holder or nominee in the demat account.

Who can nominate?

  • Nomination is applicable for all demat accounts held by an individual singly or jointly.
  • Only account holders can nominate, Power of Attorney holders can not nominate.

Who can be a nominee?

  • Any individual can be a nominee in a demat account.
  • Minor, NRI and Power of Attorney holders can also be nominated.
  • Nominees can be added or changed any time.
  • Up to three nominees can be mentioned in one demat account.
  • There is no compulsion that a nominee must have a demat account at the time of nomination.
  • Nomination may be done both online and offline.





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