How to Transfer Shares to the Nominee after Death?
Designating a nominee is among the most important tasks for owners of demat accounts. In the event of the holder’s untimely death, the beneficiaries will be able to claim the shares stored in the Demat account. Understanding the legal requirements and following the correct procedures is vital to avoid delays or complications. The following details will assist you in understanding the process of transferring shares following the passing of a demat account holder. This guide will outline the key steps in transferring shares to a nominee. It will help beneficiaries understand this important financial task during a challenging time.
Key highlights
• Death certificate requirement: Obtain certified copies of the deceased shareholder’s death certificate.
• Nominee details verification: Ensure the nominee’s information matches the company’s or depository participant’s records.
• Documentation submission: Provide necessary forms, including transmission request and indemnity bond, to the registrar or transfer agent.
• Legal heir certificate: If no nominee is registered, legal heirs may need to submit a succession or legal heir certificate.
• Processing time: The transfer process typically takes a few weeks to complete, depending on the company and documentation accuracy.
Table of Contents
Steps to the Transfer of Shares to the Nominee After Death
Both single and joint holders are possible for a Demat account. If a holder passes away in either scenario, the Demat account is transferred under the circumstances. The following is a list of the scenarios and corresponding steps:
Online Demat Account Transfer
- Go to the CDSL website and click the “Register Online” option to create an account.
- Provide all the information requested on the form.
- To print the form, select this option.
- The respective Depository Participant receives the transfer of the Demat Account.
- You will receive a password to your registered email ID once the depository participant has completed the verification process.
- To log in and move the desired shares, use this password.
Offline Demat Account Transfer
The manual demat account transfer takes place when your new broker and your current broker are linked to separate depositories.
The following details must be entered by the trader on the DIS (Debit Instruction Slip):
- List the shares you wish to transfer.
- Additionally, note the International Securities Identification Number (ISIN), a 12-digit number that is used to identify securities like stocks, bonds, and other financial instruments.
- Since the ISIN will be used to conduct the transaction, make sure it is accurate.
- Keep a record of the Target Client ID.
- Choose between an inter-depository transfer and an off-market transfer.
- Take care to mark the appropriate selection.
- Once the DIS is completed, you must send it to your current broker. In exchange, you’ll get an acknowledgement slip.
The Demat Account Transfer process takes three to five business days to complete. The broker has the option to charge it or not.
Conclusion
After a shareholder passes away, transferring shares to a nominee is a big obligation that needs to be done carefully and per the law. Nominees can ensure a seamless transfer of assets by following the instructions provided. Remember that each case may have unique circumstances, and seeking professional advice when needed can be invaluable. With patience and diligence, nominees can complete this important task. If you own a Demat account and haven’t yet designated a nominee, contact your depository participant to learn more about the process.