My father in law(FIL) died to leave some stock in his demat account. He made nominee to my brother in law at the time of starting of share transaction in 1994. in 2002 FIL verbally detach his son from all relations and property. I got married in 2004. FIL suffering with liver cancer which was detected on 2007. he died on July 2009. he spend his last year in our house. but when he passed away, my mother in law called her son to maintained rituals. after a year of that death, my brother in law sold some stock and transfer rest of stock to his demat account from FIL demat account, without taking any permission from his sister.
now my question
is that transaction lawful or not? can my wife demand her share from those stock or equal amount of her share.
Refer my post “Nominee rights-Different rules for different products !!!“.
When you decide to invest in the share market, you must immediately open a Demat Account as well as a trading account. Demat Account involves two crucial factors – depositories and depository participants (DPs). Depositories are intermediaries such as brokers, banks, etc. As for DPs, there are two entities in India – National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL).
What happens in case of the death of single or one of the joint account holders?
Rules depend on the securities held in the Demat Account. One person can hold such an account or jointly. In case of the death the account holder, be it a single individual or one of the joint holders, the surviving joint holder or the legal heir of the deceased will need to approach the DP with necessary transmission papers.
How does the nomination process take place?
- If a single Demat Account holder dies and not registered any nominee, the securities are transmitted to the heirs of the deceased as per the directive of the competent court
- If the securities are less than INR 1 lakh, you must furnish the transmission submission form, attested death certificate copy, letter of indemnity, an affidavit, and NOC from all heirs
- In joint Demat Account holder scenario, the securities get transmitted to the surviving holder by submitting the transmission form, attested copy of the death certificate
- The surviving holder needs to open another account under the DP for transferring of the securities