Assuming a client has passed away and has not appointed a nominee, what happens to the funds lying in his trading account? Can it be transferred to his legal heir?
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In the above case, the heirs of the deceased has to submit the legal (court) documents proving that they are the legal heirs & have authority to get the shares/cash to be settled to their account.
Trading account usually has funds and F&O positions, and demat accounts has holdings. Both trading and demat has a facility to nominate a person, assuming the client while opening an account has not nominated:
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Trading account: Since there is only funds in the trading account, it can be withdrawn to the bank account, and most likely there would be a nominee on the bank account. Even if there is no nominee on the bank account, the legal heir can claim for the funds from the bank.
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Demat account: The holdings can be transferred to the legal heir, once proper documents from the court is produced indicating that he/she is the legal heir.
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I think the broker purges the trading account 3 months once and send the money lying in the trading account to the bank account. This solves one thing.
But the shares in demat account has to settled through court route, I suppose, proving the legal heir thing.
P.S: Its better to add nominee, its late than never. Anytime we can add nominee even after opening the account. Hope everyone has done that. 