Question 1

Once a trust is validly created, it is usually irrevocable.

Accepted Answer

A) True 
 B)False

Question 2

The powers of a trustee are determined solely by the trust instrument.

Accepted Answer

A) True 
 B)False

Question 3

Creditors of the beneficiary of a spendthrift trust can attach the income of the trust before or after the beneficiary receives it, but they cannot reach the trust fund itself.

Accepted Answer

A) True 
 B)False

Question 4

Taxes imposed at death include:

Accepted Answer

A)  income tax that the estate must pay on income received during estate administration. 
B)  federal estate tax on the transfer of property at death. 
C)  state inheritance tax on the privilege of an heir or beneficiary to receive the property. 
D)  All of these. 
A)  income tax that the estate must pay on income received during estate administration. 
B)  federal estate tax on the transfer of property at death. 
C)  state inheritance tax on the privilege of an heir or beneficiary to receive the property. 
D)  All of these.

Question 5

A valid will must be witnessed. Which of the following statements about witnesses is correct?

Accepted Answer

A)  Most states require only one witness to a will. 
B)  The witnesses must see the testator write the will. 
C)  The witnesses must sign the will. 
D)  Under the law in all states, witnesses lose any bequests to them in a will they witness. 
A)  Most states require only one witness to a will. 
B)  The witnesses must see the testator write the will. 
C)  The witnesses must sign the will. 
D)  Under the law in all states, witnesses lose any bequests to them in a will they witness.

Question 6

In most states, a trustee's investment decisions are usually governed by:

Accepted Answer

A)  the prudent person rule. 
B)  judiciary determination. 
C)  the beneficiary's intent. 
D)  The Uniform Principal and Income Act. 
A)  the prudent person rule. 
B)  judiciary determination. 
C)  the beneficiary's intent. 
D)  The Uniform Principal and Income Act.

Question 7

An attorney receives a check from the defendant in settlement of a lawsuit brought by his client, the plaintiff. Even if the check is made out in the name of the attorney, it will belong to the client as a:

Accepted Answer

A)  resulting trust. 
B)  constructive trust. 
C)  totten trust. 
D)  spendthrift trust. 
A)  resulting trust. 
B)  constructive trust. 
C)  totten trust. 
D)  spendthrift trust.

Question 8

Which of the following would be charged to the life tenant's interest in the course of administering a trust?

Accepted Answer

A)  Expenses of selling a trust investment. 
B)  The costs of establishing the trust. 
C)  Ordinary repairs to trust property. 
D)  Permanent improvements to the trust property. 
A)  Expenses of selling a trust investment. 
B)  The costs of establishing the trust. 
C)  Ordinary repairs to trust property. 
D)  Permanent improvements to the trust property.

Question 9

A second will automatically revokes an earlier will if it is wholly inconsistent.

Accepted Answer

A) True 
 B)False

Question 10

Rules for the distribution of property in a situation involving intestate succession:

Accepted Answer

A)  do not apply to property held in joint tenancy. 
B)  apply where the testator has failed to name an administrator. 
C)  prevent disposition of property by a valid will. 
D)  have no application to real estate owned by the decedent. 
A)  do not apply to property held in joint tenancy. 
B)  apply where the testator has failed to name an administrator. 
C)  prevent disposition of property by a valid will. 
D)  have no application to real estate owned by the decedent.

Question 11

In the case of Keeney v. Keeney , the court found:

Accepted Answer

A)  a constructive trust is created by equity regardless of the intention of the parties to create a trust where legal title to property is obtained through fraud or undue influence rendering it unconscionable for the holder of legal title to retain the property. 
B)  intention of the parties is the sole consideration in determining the existence of a trust. 
C)  the existence of a confidential relationship prohibits the trustee from seeking any personal benefit. 
D)  a totten trust is a tentative trust and the transfer of ownership becomes complete only upon the depositor's death. 
A)  a constructive trust is created by equity regardless of the intention of the parties to create a trust where legal title to property is obtained through fraud or undue influence rendering it unconscionable for the holder of legal title to retain the property. 
B)  intention of the parties is the sole consideration in determining the existence of a trust. 
C)  the existence of a confidential relationship prohibits the trustee from seeking any personal benefit. 
D)  a totten trust is a tentative trust and the transfer of ownership becomes complete only upon the depositor's death.

Question 12

A stepchild will not ordinarily inherit under intestacy statutes unless legally adopted.

Accepted Answer

A) True 
 B)False

Question 13

A living will is a document that:

Accepted Answer

A)  is videotaped. 
B)  contains the maker's wishes regarding extraordinary medical treatment. 
C)  is capable of being changed from time to time, unlike other wills. 
D)  cannot be revoked. 
A)  is videotaped. 
B)  contains the maker's wishes regarding extraordinary medical treatment. 
C)  is capable of being changed from time to time, unlike other wills. 
D)  cannot be revoked.

Question 14

Under what conditions do courts impose a constructive trust?

Accepted Answer

Constructive trusts are impose

Question 15

A trust may serve any purpose that is not illegal or against  public policy.

Accepted Answer

A) True 
 B)False

Question 16

Lathan served as a witness to Samuel's will, but died before Samuel. When Samuel's will is probated, proof of Lathan's handwriting is necessary unless there are enough other witnesses to meet the statutory requirements without Lathan .

Accepted Answer

A) True 
 B)False

Question 17

Of the following elements, which one is NOT required to create an enforceable trust?

Accepted Answer

A)  Consideration. 
B)  Legal capacity. 
C)  Specific property. 
D)  A beneficiary. 
A)  Consideration. 
B)  Legal capacity. 
C)  Specific property. 
D)  A beneficiary.

Question 18

Jameson, a trustee, fraudulently purchases property with trust funds and puts title in his own name. What type of trust will a court create?

Accepted Answer

A)  Constructive trust. 
B)  Implied trust. 
C)  Express trust. 
D)  Resulting trust. 
A)  Constructive trust. 
B)  Implied trust. 
C)  Express trust. 
D)  Resulting trust.

Question 19

A trust created by will and effective after the death of a testator is called a(n):

Accepted Answer

A)  charitable trust. 
B)  cy pres trust. 
C)  inter vivos trust. 
D)  testamentary trust. 
A)  charitable trust. 
B)  cy pres trust. 
C)  inter vivos trust. 
D)  testamentary trust.

Question 20

A trust will fail for lack of:

Accepted Answer

A)  consideration. 
B)  a trustee. 
C)  definite and specific property forming the trust corpus. 
D)  All of these. 
A)  consideration. 
B)  a trustee. 
C)  definite and specific property forming the trust corpus. 
D)  All of these.

Exam 50: Trusts and Wills

Once a trust is validly created, it is usually irrevocable.

The powers of a trustee are determined solely by the trust instrument.

Creditors of the beneficiary of a spendthrift trust can attach the income of the trust before or after the beneficiary receives it, but they cannot reach the trust fund itself.

Taxes imposed at death include:

A valid will must be witnessed. Which of the following statements about witnesses is correct?

In most states, a trustee's investment decisions are usually governed by:

An attorney receives a check from the defendant in settlement of a lawsuit brought by his client, the plaintiff. Even if the check is made out in the name of the attorney, it will belong to the client as a:

Which of the following would be charged to the life tenant's interest in the course of administering a trust?

A second will automatically revokes an earlier will if it is wholly inconsistent.

Rules for the distribution of property in a situation involving intestate succession:

In the case of Keeney v. Keeney , the court found:

A stepchild will not ordinarily inherit under intestacy statutes unless legally adopted.

A living will is a document that:

Under what conditions do courts impose a constructive trust?

A trust may serve any purpose that is not illegal or against public policy.

Lathan served as a witness to Samuel's will, but died before Samuel. When Samuel's will is probated, proof of Lathan's handwriting is necessary unless there are enough other witnesses to meet the statutory requirements without Lathan .

Of the following elements, which one is NOT required to create an enforceable trust?

Jameson, a trustee, fraudulently purchases property with trust funds and puts title in his own name. What type of trust will a court create?

A trust created by will and effective after the death of a testator is called a(n):

A trust will fail for lack of:

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance Breach and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits Collections and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

Introduction to Property Property Insurance Bailments and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Filters