CMFAS M9 Tax, Nomination, Wills & Trusts question: sole nominee dies before the policy owner

CMFAS M9Tax, Nomination, Wills & Trusts

A policy owner makes a revocable nomination naming a single nominee. That sole nominee dies before the policy owner and no fresh nomination is made. The nomination is:

A Passed to the deceased nominee's estate
B Transferred to the policy owner's legal next of kin
C Automatically revoked
D Automatically converted into an irrevocable trust nomination

Show the answer and explanation

Answer: C. Automatically revoked

Where a revocable nomination has a sole nominee who dies before the policy owner, the nomination is automatically revoked, so the proceeds fall back into the owner's estate (distributed under his will or intestacy). Where several nominees are named, the nomination is revoked only when all of them predecease the owner, and a surviving nominee absorbs a deceased nominee's share.

Common mistake

Do not apply the trust-nomination rule (a deceased trust nominee's share goes to his estate) here - a sole revocable nominee dying simply revokes the nomination.

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Original study material mapped to the public CMFAS M9 syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.