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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Basics of Estate Planning

Caselet: Mr. Sameer Khanna wants his assets to be managed after his death for the benefit of his minor son until the son turns 25. Which feature of a will makes this possible most directly?

Creating a testamentary trust within the will, with a named trustee, lets assets be held and managed for the minor son until age 25. It takes effect on death, unlike a power of attorney, and gives controlled distribution that simple nomination does not.

  1. ANaming a nominee in each bank account, who then becomes absolute owner
  2. BCreating a testamentary trust in the will with a named trusteeCorrect
  3. CGiving the son a power of attorney
  4. DRegistering a gift deed in the name of the minor's school

Explanation

A testamentary trust is created through the will and comes into existence on death, letting a trustee hold and manage assets for a beneficiary until a stated age. A power of attorney lapses on death and a minor cannot exercise it meaningfully. Under the usual view for succession purposes, a nominee is not the absolute owner.

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