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

Mr. Rao, a resident Indian, wants his estate to pass to his daughter after his death, with a trustee managing the assets until she turns 25. Which tool is most suited to this need?

A testamentary trust created through the will is best suited, because it starts on death and lets a trustee hold and manage the assets until the daughter reaches 25. Gift deeds, joint holdings and nominations do not provide this deferred control.

  1. AA registered gift deed to the daughter now
  2. BA joint holding with the daughter as first holder
  3. CA nomination in the bank account naming the daughter
  4. DA testamentary trust created through his willCorrect

Explanation

A testamentary trust is created by a will and comes into effect on death, so a trustee can hold and manage assets until the stated age. A gift deed transfers ownership immediately. A nominee only receives the asset as a custodian for legal heirs and no control over timing exists. Joint holding gives control and ownership to the daughter at once.

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