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

Mr. Raghunathan, aged 70, wants his flat to pass to his daughter after his death, but wants to retain full control and the ability to change his mind, including revoking the arrangement, during his lifetime. Which estate planning tool best fits this need?

A revocable trust, with Mr. Raghunathan as trustee during his life, fits best. It keeps control with him and lets him amend or revoke it, while the flat passes to his daughter as per the deed afterwards. Gift, release and irrevocable trust transfer rights irrevocably.

  1. AAn irrevocable trust with an independent trustee
  2. BA gift deed in favour of the daughter
  3. CA revocable living trust with himself as trustee during his lifetimeCorrect
  4. DA release deed in favour of the daughter

Explanation

A revocable trust lets the settlor keep control and revoke or amend it while alive, and the asset passes to the beneficiary per the trust deed afterwards. A gift deed and release deed transfer rights immediately and irrevocably, and an irrevocable trust cannot be freely undone.

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