NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Tools for Estate Planning
Which statement about a power of attorney (PoA) in estate planning is correct?
A power of attorney ceases to be effective when the person who granted it dies. It only lets an agent act for the grantor during life, does not transfer ownership, and cannot be used to carry out the will after death.
- AA PoA continues to be valid after the death of the person who granted it
- BA PoA can be used to execute the grantor's will after death
- CA PoA ceases to be effective on the death of the grantorCorrect
- DA PoA transfers ownership of the assets to the agent immediately
Explanation
A PoA authorises an agent to act on behalf of the grantor during the grantor's lifetime, and the authority terminates on the grantor's death. It does not transfer ownership and cannot substitute for a will or executor after death.
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