Legacy Matters. Transfer of savings on account holder’s death

The loss of a loved one can cause great emotional pain. To make matters worse, there can also be financial stress if the family is not able to easily access the financial assets of the deceased. While emotional pain is often inevitable, the financial stress can be avoided with some planning.

Some simple steps can help ease the transmission process. First, maintain a physical record of all investments/statements and other documents as well as contact details of the relevant staff in the respective financial institutions to address queries.

Second, keep key family members in the know about logins, passwords and registered email ids. This will help retrieve digital records that may be needed to claim the investment corpus. Third, ensure safekeeping of original identification documents such as PAN and Aadhaar. Finally, having a nominee registered for all investments will help the family get hold of the investment proceeds without hassles.

Claiming the proceeds

The process of claiming the proceeds can happen quickly if the nominee is registered. Having a legal heir as the nominee helps avoid issues and delays in passing on the wealth.

Most of us have investments in banks, either as fixed deposits, recurring deposits, or least a savings bank account. If the deceased holder’s account has a survivorship clause (accounts with ‘either or survivor’ clause), the process is simple. The survivor has to submit an application duly filled along with a photocopy of the death certificate. In case of a savings or current account, the bank generally advises the survivor to open a fresh account and transfer the proceeds to the new account. In case of FDs and RDs, one can continue with the account by just deleting the deceased name, or the survivor can close the account and create a new one. Even in accounts with a survivorship clause, it is good to have a nominee.

If there is no survivorship clause, the nominee has to apply to the bank with complete details of the deceased depositor’s accounts, photo copy of the death certificate and other details as required.

The bank branch will verify the documents and confirm the nomination number to validate authenticity. The nominee will have to provide signatures of two witnesses of good standing and integrity, who are acceptable to the bank. The witness should be one of the following — a magistrate or a judicial official, any officer of the Central/State government, any officer of the bank, or any two persons acceptable to the bank.

If the registered nominee is a minor, the person appointed by the deceased account holder to act on behalf of the minor until the minor nominee attains majority, has to submit an application to the bank with details of the accounts of the deceased.

In case the deceased account holder has no nominee and the account does not have a survivorship clause, and the holder has died without a will, the money will be transferred only to the legal heir(s). The process can be completed through an indemnity-cum-affidavit process, provided there aren’t any legal disputes among the legal heirs.

Documents

For claiming the assets through the indemnity-cum-affidavit process, the legal heirs will have to submit the following documents: photocopy of the death certificate, KYC details of the legal heir(s), account details of the claimant(s), claim form filled and signed by the claimant(s), declaration in the claim form regarding the legal heirs(s).

The indemnity-cum-affidavit will have to be signed by one of the following individuals: an independent person well known to the family of the deceased but unrelated to them and acceptable to the bank; any account holder of the bank known to the family of the deceased but unrelated to them, or any government official whose signature is verifiable by the bank.

The declaration has to be sworn as an affidavit before a Judicial Magistrate or a notary public, and a surety has to be given when the settled amount is more than ₹5 lakh.

The process for claiming the proceeds is long. So, it is in the interest of the family to have a nominee registered or enable the survivorship clause. This will help the family cope better without much financial stress.

The writer is co-founder, RaNa Investment Advisors

COMMENT NOW