Mutual Funds Without a Nominee: What Should Families Check?

Many mutual fund folios in India still have no nominee. Some are old folios from before nomination was encouraged. Some were opened on an app where the nominee step was skipped. Some name a person who has since passed away.

This is easy to fix while the investor is alive, but much harder for the family later. This post covers why nomination matters, how to check and update it, what changed in SEBI's rules this month, and what happens if the investor has already died.

Why nomination status matters

A nominee is the person the fund house transfers units to after the investor dies. When there is a nominee, the claim is usually straightforward: death certificate, nominee's KYC and bank details, a transmission form.

Without a nominee, the family has to prove who the legal heirs are. Depending on the amount and the fund house's rules, that can mean a succession certificate, probate of a will, legal heir certificates, NOCs from other heirs and indemnity bonds. This takes more time and money, and can lead to family disputes.

What changed in SEBI's nomination rules

SEBI revised nomination rules for mutual funds and demat accounts in January 2025, and then revised them again through a circular dated 29 May 2026. The newer rules apply from 1 September 2026.

Key points from the 2026 framework, as reported:

• New single-holder folios must either add a nominee or submit a clear opt-out declaration. Skipping the step is no longer treated as opting out.
• Only the nominee's name and relationship are mandatory, plus date of birth if the nominee is a minor. Other details are optional.
• The maximum number of nominees per folio was reduced from the limit allowed under the 2025 rules. Check with your fund house or platform for the current limit.
• Investors can change or cancel a nomination as often as they like.
• Folios without a nomination get periodic reminders.

These rules mainly affect how nominations are made going forward. Existing folios without a nominee are not frozen, but they are worth fixing. Always check SEBI's website or your fund house for the current rules, since this area has changed several times recently.

How to check nomination status

There are a few simple ways:

• Your account statement or CAS. Statements show nomination status, either the nominee names or a Yes/No indicator. Get a CAS from MF Central, CAMS or KFintech.
• MF Central or the registrar's website. Log in with your PAN to see folio details, including nominee status.
• Your investment app or platform, if you invest through one. Check each folio, not just your profile.
• The fund house website or branch.

Check every folio. It is common to find that newer folios have a nominee and older ones do not.

How to add or update a nominee

You can usually update nominees:

• Online through MF Central, the registrar's site, the fund house site or your platform. Online changes are typically validated with OTP or e-sign.
• Offline with a signed nomination form at a fund house or registrar service centre.

You will need the nominee's name and relationship, and a few more details if you choose to give them. If you name more than one person, decide the percentage each one gets. Without percentages, the units are usually split equally.

For joint folios, adding or changing a nominee typically needs all holders to agree.

Opting out, where allowed

You can choose not to nominate anyone by submitting an opt-out declaration. It is your right. But be aware it makes things harder for your family later. If you opt out, a clear and current will becomes even more important.

Nominee versus legal heir

This is the part many families misunderstand. In India, a nominee is not always the final owner. The nominee receives the units, but may hold them on behalf of the legal heirs.

The Supreme Court made this clear for securities in December 2023 in Shakti Yezdani v. Jayanand Salgaonkar. Who finally inherits is decided by the will, or by succession law if there is no will.

So for most families the best setup is:

• A nominee on every folio, so the transfer is smooth
• A will, so the final ownership is clear

What happens if the investor has already died without a nominee?

The money is not lost. The legal heirs can claim it. Expect to:

1. Inform the fund house or registrar with the death certificate and the investor's PAN
2. Fill the transmission form
3. Provide legal heir documents as asked, which depend on the value and the fund house
4. Get NOCs from other heirs where required

Our guide on finding mutual funds after an investor dies walks through this in more detail.

A checklist for reviewing family folios

• Get a CAS for each family member
• List every folio and its nominee status
• Mark folios with no nominee or an outdated one
• Update nominees online or with a form
• For joint folios, get all holders to sign off
• Decide percentages if naming more than one nominee
• Check parents' folios too, with their consent
• Make sure there is a will alongside
• Keep the acknowledgement for every change

Nominees are only one part of making sure your family can claim your money. Our guide on making sure your family can find your investments covers the rest.

Frequently Asked Questions

Is it compulsory to add a nominee to a mutual fund?

For new single-holder folios under SEBI's 2026 rules, you must either nominate or formally opt out. Existing folios without a nominee are not frozen, but adding one is strongly advised.

Can I add a nominee to an old mutual fund folio online?

Usually yes, through MF Central, the registrar, the fund house or your platform. Some very old or physical folios may need an offline form.

What happens to a mutual fund with no nominee after death?

The legal heirs can claim it through transmission, but they will need more documents, such as legal heir proof, which takes more time.

Does the nominee get the money even if there is a will?

The nominee may receive the units first, but the will decides who finally owns them. The nominee may have to pass them on to the heirs named in the will.

How many nominees can I add to a mutual fund folio?

The limit has changed more than once since 2025. Check your fund house or platform for the current number under SEBI's latest rules.

Not sure if all your folios have nominees? Our free Family Health Check asks about this and other common gaps. Kashly experts can also help your family with nominees and paperwork through a family account.