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How to Transfer Equity Stocks to Legal Heirs, Nominees in Case of Death?

by Hunny Jaswal - 13 Oct 2022, Thursday 229 Views Like (0)
How to Transfer Equity Stocks to Legal Heirs, Nominees in Case of Death?

Share market investors must appoint a nominee for their demat accounts. Beneficiaries can claim the shares stored in the demat account in case the investors suffer an unfortunate event like an untimely death. It is possible to transfer the shares present in the demat account to their legal heirs even if they are not nominated by the deceased. However, letís first discuss the process when a nominee is appointed by the deceased account holder. 

How to transfer the stocks to the nominee?

The following steps can be followed if you are a nominee to a deceasedís demat account:

Step 1: Fill the TRF 

Your first move should be to obtain a TRF (Transmission Request Form) from your DP (Depository Participant). The form must be duly filled with accurate details. 

Step 2: Submit the form with the documents 

After filling the form, you should submit it with a notarised copy of the deceasedís death certificate. 

Note: There are several benefits of demat accounts such as the shares can be transferred from one account to another online. However, online transfers cannot be done once the demat account holder dies. Therefore, you will have to visit the DP in person, explain the situation, and seek guidance for the share transfer process. 

Step 3: Submit proof of relationship with the account holder 

The DP might also ask you to submit a proof that validates your relationship with the demat account. Along with that, you may also need to submit your address and identity proofs to the DP. 

Step 4: Document verification 

After receiving the TRF form and documents, the DP will verify it thoroughly and if everything goes well, your share transmission request will be approved. The shares will be directly transferred to your demat account by the DP. 

Once the shares are transferred to your demat account, you can sell them online without any issues. You should open a demat account immediately if you donít have a demat account but are a nominee to a demat account. Free demat account opening facility is offered by many brokers these days to encourage individuals to invest in the stock market. 

How to transfer stocks if the nominee is not appointed by the account holder?

The following steps need to be followed if the deceased demat account holder has not appointed any nominee to their account:

Step 1: Fill and submit the TRF 

If you are a legal heir of the deceased demat account holder who has not appointed a nominee to their account, you still need to fill out and submit the TRF form. 

Step 2: Submit the documents required 

If the deceased has not left a will, you will need to submit documents like court orders, succession certificate, or notarized copy of the death certificate. 

If the deceased has left a will, you will need to produce a letter of administration or probate. Probate is a will that has been proven in court. A letter of administration is the legal document that proves succession if the deceased has died intestate. 

If you are unable to produce any of these documents, you can still claim the securities of the deceased if their value in the demat account is up to Rs. 1,00,000. However, the following things need to be submitted in this case:

  • NOC (No Objection Certificate) from all the legal heirs of the deceased.
  • A stamp paper affidavit that mentions your claim for the deceasedís shares or securities. 
  • Indemnity letter verified by an independent guarantor. 

It is quite clear that the process of transferring stocks or securities of a deceased person can be complicated if their demat account does not have a nominee. Therefore, ensure that you nominate a spouse or any other close relative who can claim the investments held in your demat account after your death.