Hello Readers!
Do you hold an investment in any of the financial security be it mutual funds or the stock market? Well, if you are investing in any financial security for the long term you must take care of not only on-time transactions but also, easy transition!
It’s hard to predict the future after 10-20 years, thus besides your proper planning of investment, you must ensure a proper and smooth transition of your financial assets, in case of an untimely death. It not too difficult to plan for it, you only have to think about joint ownership, at the time of investing.
Many financial securities like mutual funds, portfolio management schemes, equity shares (through a de-mat account) and bonds, allow you to invest with another holder or owner. You just need to pick one of these financial securities and choose the option of Joint Holding Investment.
To be efficient in making these choices, here is what you need to know.
How A Joint Holding Is Operated?
When there is more than one owner of investment in financial security or Mutual funds, then every holder is accountable for any fresh investment, redemptions, or any change in details of the investment account. The norm is that unless specified that only one of the holders can operate the account, it has to be operated with all the joint holders’ signatures.
Ease Out The Succession Or Transmission Process……..
The most prominent benefit of joint holding in investment is the easy transmission of your investments, to your joint holder, but one must note that the transmission process is not carried out automatically. If there is a Will, then the details in the Will must also correspond with the joint ownership of assets. If both the Will and joint ownership match, transference can happen without any hold-ups.
In case if there is no will, then the relation between the primary holder and the joint holder must be established. However, the process of transmission may get hindered in case if there is more than one joint holder and there is a kind of stretch between both regarding the rights on the assets.
Investors must also know that the process of transfer to a joint holder can be done very quickly given that the KYC details would already be in place.
Joint Holding Is Not An Alternate To Nominee………
Having a joint holder is not a replacement for a nominee. For example, a married couple may want joint ownership or holding for their financial assets and the children could be made nominees. Making your children nominees in your investment helps a lot in case of any unwanted event of both the parents.
One must understand the difference between a nominee and a joint holder. The nominee is not a legal heir, but more like a trustee to the assets and in the absence of any other legal heir, can claim sole rights to the financial assets. While a joint holder is the one the assets get transferred to if something untoward happens to the primary holder.
Having joint ownership or joint holding in your investment in different financial security simply protects your investment and gets it transferred to the right owner or your family in case of the untimely death of the primary holder. Thus, it is always advised you must consider having some assets jointly owned and all financial securities with nomination details.
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For any kind of query you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).