What is a Succession Certificate for NRI?
A succession certificate for an NRI is a legal document issued by a court in India. It authorises a legal heir to collect money and financial assets of a person who passed away without leaving a will.
It is mainly used for financial assets such as:
- Savings account and current account in the bank
- Shares, mutual funds, bonds, and debentures
- Insurance amounts payable to the estate
- Fixed deposits and recurring deposits
- Money due to the deceased, like unpaid rent or personal loans
This certificate does not apply to immovable property such as land, flats, or houses. Property transfer follows a separate legal process.
When Does an NRI Need a Succession Certificate?
If you live outside of India and there is no will, no nominee, or more than one heir, banks and other financial institutions in India may seek a succession certificate.
Some such situations are listed below:
- A parent died without a nominee on their bank accounts.
- Old demat or investment accounts often lack the necessary information.
- Insurance or PF accounts never had an updated nominee.
- Family members live in various countries and can't agree on how to divide up their assets.
Banks often require a succession certificate when there are numerous heirs or when the assets are of significant value.
When Should You Apply?
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You should apply if:
- There is no will, or the will is disputed
- There is no nominee, or the nominee has passed away
- The bank or financial institution asks for it
- There are multiple heirs, and clarity is needed
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You may not need it if:
- A valid will exists, and probate is already granted
- Assets are small, and the bank agrees to release them
- Nominees are listed, and there are no disputes
Getting a succession certificate is the safest way to avoid complications in the future with high-value assets.
How to Apply for a Succession Certificate?
The following is the step-by-step guide to obtaining a succession certificate:
Step 1: Pick the Court
You apply to the district court where the person who died lived last. If you are not sure, you can file where the assets are.
Step 2: Get the Application Ready
Include information such as the date of death, the last address, the list of heirs, your relationship, and the money and property. This process is typically more straightforward when you hire a lawyer in India.
Step 3: Get Your Papers Together
You will usually need:
- A death certificate
- A passport and proof of an address outside of India
- Proof of relationship
- A copy of your PAN card
- Bank or investment statements
- A power of attorney if someone else in India is taking care of it for you
The Indian embassy or consulate must verify any documents signed outside India.
Step 4: Pay the court fees and stamp duty
When you file, pay the court fees. After obtaining approval, you must pay stamp duty based on the value of the item. Rates vary from state to state.
Step 5: Inform the Public
The court publishes a notice in a newspaper for approximately a month to determine if anyone has an issue.
Step 6: Court Hearing and Issuance of Certificate
The court grants the succession certificate if no one objects. An indemnification bond is sometimes necessary. If there are no problems, the process usually takes 5 to 8 months.
How to Use a Succession Certificate?
You can visit banks, brokers, mutual fund firms, and insurance companies once you have obtained the certificate.
You can:
- Close accounts and get your money back
- Move shares and investments. Get paid for insurance claims or unpaid wages
When institutions distribute money based on this certificate, they are legally protected.
Succession Certificate vs Legal Heir Certificate
These two certificates differ in the following way:
- A succession certificate is issued by a court and is needed to claim money and investments.
- A local authority issues a legal heir certificate and simply lists the heirs.
For smaller amounts, banks may accept a legal heir certificate. But for larger assets, you will almost always need a succession certificate.
Cancelling a Certificate
If someone obtains a certificate by suppressing facts or providing false information, a court may invalidate it. Payments made in good faith are usually safe.
Conclusion
Handling financial matters in India after losing a family member can be stressful, especially if you live abroad. A succession certificate gives you legal clarity and peace of mind. Though the process takes time, it ensures funds are released safely and reduces the chances of disputes.
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