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

Mr. Raghunathan Iyer, a Chennai resident, wishes to ensure that his flat passes to his daughter only after she turns 30, with a trusted friend managing it until then. His main concern is that the flat should not be controlled directly by the daughter, who is currently 19. Which estate planning tool best serves this need?

A trust with the friend as trustee and the daughter as beneficiary is the best tool. The trustee holds and manages the flat and can transfer it when she turns 30, whereas a plain will, gift or nomination would give or leave control with her or ignore the age condition.

  1. AA will that names the daughter as the sole legatee, with no further conditions
  2. BA nomination in the housing society records in favour of the daughter
  3. CA gift deed transferring the flat to the daughter immediately
  4. DA private discretionary or specific trust with the friend as trustee and the daughter as beneficiaryCorrect

Explanation

A trust separates legal ownership (held by the trustee) from beneficial enjoyment (by the beneficiary), so the trustee can manage the asset and hand it over at the age the settlor sets. A simple will or gift deed passes ownership outright to the daughter, while a nomination only makes the nominee a custodian and does not confer conditional ownership.

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