Deck 12: Introduction to Trusts

Question 1

MATCHING:
a.legal title
b.cestui que trust
c.equitable title
d.testamentary trust
e.trust agreement
f.principal
g.income
h.Restatement of the American Law of Trusts
i.Uniform Trust Code
j.parol evidence
The form of ownership of trust property held by the trustee and giving him/her the right to control and manage the property for another's benefit

Answer 1

A

Question 2

The trust instrument must either specifically describe the trust property or clearly define the procedure to be followed in identifying the trust property.

Answer 2

True

Question 3

A settlor may cancel a trust if a property transfer is accomplished through duress.

Answer 3

True

Question 4

MATCHING:
a.legal title
b.cestui que trust
c.equitable title
d.testamentary trust
e.trust agreement
f.principal
g.income
h.Restatement of the American Law of Trusts
i.Uniform Trust Code
j.parol evidence
The authority on trust law in most states

Question 5

The settlor's retention of control over the trust arrangement exposes the settlor to tax liability for the trust income.

Question 6

MATCHING:
a.legal title
b.cestui que trust
c.equitable title
d.testamentary trust
e.trust agreement
f.principal
g.income
h.Restatement of the American Law of Trusts
i.Uniform Trust Code
j.parol evidence
A uniform law available for adoption by states to provide a uniform codified law on trusts

Question 7

MATCHING:
a.legal title
b.cestui que trust
c.equitable title
d.testamentary trust
e.trust agreement
f.principal
g.income
h.Restatement of the American Law of Trusts
i.Uniform Trust Code
j.parol evidence
The capital or property of a trust

Question 8

MATCHING:
a.legal title
b.cestui que trust
c.equitable title
d.testamentary trust
e.trust agreement
f.principal
g.income
h.Restatement of the American Law of Trusts
i.Uniform Trust Code
j.parol evidence
A contract, made between and signed by the settlor and trustee, that creates a trust

Question 9

MATCHING:
a.legal title
b.cestui que trust
c.equitable title
d.testamentary trust
e.trust agreement
f.principal
g.income
h.Restatement of the American Law of Trusts
i.Uniform Trust Code
j.parol evidence
The right of the beneficiary to receive the benefits of the trust

Question 10

An infant may be a beneficiary of a trust.

Question 11

After the creation of a trust, title to property placed in the trust passes to at least two persons with the trustee receiving the equitable title and the beneficiary receiving the legal title.

Question 12

Trustees must generally be paid.

Question 13

If there are two trustees, one may make a determination to take action without the other's consent.

Question 14

Any transferable interest in an object of ownership may become trust property.

Question 15

Beneficiaries of a trust must be defined by name.

Question 16

MATCHING:
a.legal title
b.cestui que trust
c.equitable title
d.testamentary trust
e.trust agreement
f.principal
g.income
h.Restatement of the American Law of Trusts
i.Uniform Trust Code
j.parol evidence
The person who has the enjoyment and benefit of trust property

Question 17

MATCHING:
a.legal title
b.cestui que trust
c.equitable title
d.testamentary trust
e.trust agreement
f.principal
g.income
h.Restatement of the American Law of Trusts
i.Uniform Trust Code
j.parol evidence
Oral testimony or written evidence

Question 18

MATCHING:
a.legal title
b.cestui que trust
c.equitable title
d.testamentary trust
e.trust agreement
f.principal
g.income
h.Restatement of the American Law of Trusts
i.Uniform Trust Code
j.parol evidence
The monetary gain that is generated from the principal of a trust

Question 19

MATCHING:
a.legal title
b.cestui que trust
c.equitable title
d.testamentary trust
e.trust agreement
f.principal
g.income
h.Restatement of the American Law of Trusts
i.Uniform Trust Code
j.parol evidence
A trust included in a will

Question 20

A single trust may have only one beneficiary.

Question 21

Which duty prohibits a trustee from personally profiting from his/her position as trustee (other than the compensation allowed by contract or law)?

A)Duty to take possession of and preserve trust property
B)Duty of loyalty
C)Duty to prevent the investment of the trust property
D)Duty to make payments of income and principal to the named beneficiaries

Question 22

Which is an example of remainder beneficiary expenses?

A)Royalties
B)Depreciation
C)Stock splits
D)Costs incurred in the sale or purchase of principal

Question 23

The court may appoint or replace a trustee in all of the following circumstances EXCEPT:

A)The trustee is incompetent
B)The named trustee declines the position.
C)The trustee dies.
D)The named trustee is also a co-beneficiary.

Question 24

Which is NOT considered valid grounds for the removal of a trustee?

A)Lack of capacity
B)Resignation of the trustee
C)Commission of a crime
D)Showing favoritism to one or more beneficiaries

Question 25

Which is NOT an essential element of a trust?

A)A sale or gift of property
B)One or more beneficiaries
C)Real or personal property
D)One or more trustees

Question 26

Which is NOT a trustee's duty?

A)Duty to account
B)Duty of performance and due care
C)Duty to make payments of income and principal to the named beneficiaries
D)Duty to prevent the investment of the trust property

Question 27

Which is an invalid trust combination?

A)The settlor, trustee, and beneficiary are three different people.
B)The settlor is also a co-trustee and a co-beneficiary.
C)The settlor is also the trustee and beneficiary.
D)The settlor is also the beneficiary, and another person is the trustee.

Question 28

To be a settlor, a person must meet all of the following requirements EXCEPT:

A)Own a transferable interest in property
B)Have the right or power to dispose of a property interest
C)Act as the beneficiary
D)Have contractual capacity

Question 29

Which judicial remedy can a beneficiary use to be compensated monetarily (either directly or through the trust) for a trustee's breach of trust?

A)Civil lawsuit to compel the trustee to reimburse the trust for any loss or depreciation in value of the trust property
B)Removal of the trustee and appointment of a new trustee
C)An injunction to compel the trustee to do or refrain from doing the act that would constitute the breach of trust
D)Suing for specific performance

Question 30

The trustee in the trust instrument is granted the power to do all of the following EXCEPT:

A)Delegate the performance of personal duties
B)Hire attorneys and stockbrokers
C)Subdivide or exchange real property
D)Lend or borrow money