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

In the context of estate planning, what does the term 'intestate succession' describe?

Intestate succession means a deceased person's assets are distributed under the applicable personal succession law because no valid will exists. It is the default legal route, differing from testamentary succession where the will directs the distribution.

  1. ADistribution of a deceased person's assets under the applicable personal succession law when no valid will existsCorrect
  2. BTransfer of assets to a trust during the owner's lifetime
  3. CDistribution of assets strictly as per the nominee named in each account
  4. DPassing of assets to the government on every death

Explanation

Intestate succession applies when a person dies without a valid will. The estate then devolves according to the personal law applicable to the deceased, such as the Hindu Succession Act or the Indian Succession Act. A nominee is generally only a custodian in many cases, and assets do not automatically go to the government.

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