Skip to content

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

Which of the following statements about nomination in a mutual fund folio or bank account, as generally understood in estate planning, is correct?

A nominee is generally treated as a person who receives the asset on behalf of the legal heirs, not as its absolute owner. The beneficial ownership passes according to the will or the applicable succession law, so nomination does not override a valid will.

  1. AA nominee is a trustee who receives the asset on behalf of the legal heirs, and the legal heirs can claim from the nominee as per succession lawCorrect
  2. BA nominee always becomes the absolute owner of the asset, overriding the will
  3. CA nomination automatically overrides any valid will of the deceased
  4. DA nominee has a better title than a legatee named in a will

Explanation

Under the prevailing legal position, a nominee is a custodian who receives the asset, and the beneficial ownership passes as per the will or succession law. Nomination therefore does not override a will. The options saying the nominee is the absolute owner or has better title than a legatee are incorrect.

Did you get it right without looking?

One question tells you little. A timed set on Basics of Estate Planning shows your real accuracy, how long you take and where you lose marks.

Practise Basics of Estate PlanningFree diagnostic mock

More Basics of Estate Planning questions