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

Mr. Suresh Menon (age 60) wants to avoid probate delays and keep control of his assets while alive, with assets passing to his two children on his death. He creates a revocable trust, transferring a flat and investments, and names himself trustee during his life. Which statement is most accurate?

He keeps the power to revoke or amend the trust while alive, and on his death the assets pass to the beneficiaries under the trust deed rather than through his Will. This is why a revocable trust helps in smooth transfer and control.

  1. AHe retains the power to revoke or alter the trust during his life, and the assets pass to beneficiaries as per the deed on his death without being part of his WillCorrect
  2. BThe trust becomes irrevocable immediately and he loses all control
  3. CThe trust assets must still pass through probate as part of his Will
  4. DThe trust cannot name his children as beneficiaries

Explanation

A revocable trust lets the settlor retain control and change terms during life. Assets held in the trust pass per the trust deed, not by the Will, so they are outside the Will's operation. Irrevocability, mandatory probate and a bar on children as beneficiaries are all wrong.

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