How securities are transmitted on death of demat account holder - Motilal Oswal

What Happens To Your Demat Account Holdings If You Pass Away

A demat account holds securities that have been dematerialized. The issue of transferring the securities held in a demat account in case of the death of the account holder, like any other asset type, needs to be addressed. 

The following are the possibilities:

1. If There Is A Nominee That You Name: 

When you open a demat account, you usually have the option of naming a nominee. The nominee is the person or entity to whom the assets in your demat account will be transferred in the case of your death. However, this transfer is not automatic. To transfer shares from your demat account to another, there are certain procedures that are to be taken. To do so, the nominee must submit the following documentation to the depository participant's (DP) office:

  • Transmission Request Form: This is a form that provides information on the account holder, the nominee you name, and your assets that need to be transferred from the demat account. The form can be retrieved on your depository participant's website (DP).
  • Death Certificate: A copy of the now-deceased account holder's death certificate that has been notarized or attested by a Gazetted Officer.
  • Client Master Report: A client master report, also known as a CMR, is a crucial KYC file that includes all of the information on a client and the demat account, including the securities, the bank account associated with the demat account, and so on. In this instance, the nominee's client master report is necessary. The CMR could be downloaded from your DP's trading platform's website.

2. Joint Demat Account

In the case of a joint demat account, the assets in the account pass to the second account holder. The following documents must be submitted in this situation:

  • This is the identical form that was necessary in the previous situation. Most DPs, however, have a distinct annexure for joint accounts that is different from the annexure necessary for a nominee. Your DP will give you the appropriate annexure to complete.
  • A Gazetted Officer must sign a death certificate.
  • The CMR of each joint account holder is required.

3. Single Account Owner With No Nominee:

How can you transfer shares of a demat account online if the account was solely handled by a single wonder, and no nominee has been named? It is a slightly more difficult scenario than the others. The following documentation must be given to the DP in order to transfer assets from one demat account to another.

  • Transmission Request Form: Just like in the previous two circumstances, a properly filled-out transmission request form is required.
  • Death Certificate: A copy of the death certificate must be submitted, and it must be attested by a notary or a Gazetted Officer.
  • A Letter Of Indemnification: A legal statement that the person named in it is the deceased's rightful successor. 
  • An Affidavit: On a non-judicial stamp paper, declaring that the applicant is the rightful heir of the deceased. 
  • A Family Settlement Deed: It might specify how the shares should be divided among the numerous remaining legal heirs.

 

Related Articles: 

How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account | Upcoming IPO | LIC IPO

 

 

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