MF investments: What to do when there is a change of karta in an Hindu Undivided Family

In the case of mutual fund investments of a Hindu Undivided Family ( HUF), if the karta dies, the individual who takes over needs to submit the following documents to the fund house or its registrar and transfer agent.

Request letter

A letter requesting a change of karta needs to be sent to the concerned asset management company. This document should be signed by the new karta, along with his seal, and all the other documents that are required.

Documents

The original death certificate or its copy notarised or attested by a gazetted officer or a bank manager, a certified bank certificate stating that the signature and details of the new karta have been appended in the HUF’s bank account, an indemnity bond signed by all surviving co-parceners and the new karta, and a KYC acknowledgement of the new karta and the HUF must be submitted.

Processing

If all the documents are found to be in order, the request will be processed by the registrar and a new folio will be generated. A statement of account will be sent to the HUF to this effect.

Partition

If, on the death of the karta, even one co-parcener demands the partition of the HUF, the entire HUF will have to be divided and its assets distributed among the co-parceners.

Points to note

> The certification by bank manager should be with his/her full signature, name, employee code, bank seal and contact number.

> If the value of units in the folios is more than the defined threshold, the asset management company can also ask for additional documents on a case-to-case basis.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre and Arti Bhargava.