Deck 9: Classification of Trusts, the Living Trust, and Other Special Trusts

Question 1

All trusts must be either express or implied.

Answer 1

True

Question 2

Charitable trusts,as public trusts,must benefit the general public.

Answer 2

False

Question 3

On the death of the settlor,a revocable living trust becomes irrevocable.

Answer 3

True

Question 4

The money in a Totten trust is a probate asset.

Question 5

The law will permit a public trust to end if the beneficiary no longer exists.

Question 6

MATCHING

A trust made between living persons

Question 7

MATCHING

A trust made when a settlor retains title to property and simply declares himself or herself trustee of the property for the benefit of another person

Question 8

MATCHING

A savings account in which money is deposited in the depositor's name as trustee for another person named as beneficiary and is payable upon the death of the depositor

Question 9

A trust that provides income payments to a person whose spouse has died only until the person remarries opposes public policy.

Question 10

The Rule Against Perpetuities places a time limit on how long a private noncharitable trust may exist.

Question 11

MATCHING

An express trust that can be either private or charitable

Question 12

A living trust can decrease income taxes.

Question 13

MATCHING

A trust that is established when the value of property exceeds the amount needed for the purpose of a private express trust

Question 14

MATCHING

A trust that is declared void for reasons other than that it has an illegal objective

Question 15

MATCHING

A trust that provides a fund for the maintenance of a beneficiary while safeguarding the fund against the beneficiary's extravagance or inexperience in spending money

Question 16

Courts frequently use resulting trusts to settle legal disputes.

Question 17

MATCHING

A resulting trust in which property is purchased and paid for by one person,at whose direction the seller transfers possession and title to another person

Question 18

MATCHING

A trust for which the trustee has the authority and discretion to accumulate or distribute trust income or principal,or both,among the trust beneficiaries in varying amounts

Question 19

If a settlor wishes to see how well a trust operates while he or she is alive,a testamentary trust should be established.

Question 20

MATCHING

A trust that may not be amended,revoked,or canceled after its creation

Question 21

Which of the following is NOT a feature of a revocable living trust?

A)It can be used as a device for saving estate taxes.
B)On the death of the settlor,the living trust becomes irrevocable.
C)It allows the settlor to manage and retain full control over the assets of the trust.
D)It allows the settlor to name himself or herself as trustee.

Question 22

Which is NOT an essential element of an express trust?

A)A charitable purpose must be expressly designated.
B)The settlor must transfer sufficiently identified property to the trust.
C)The settlor must intend to create a private trust.
D)A beneficiary of the trust must be named.

Question 23

Which of the following is a type of implied trust?

A)Constructive trust
B)Private trust
C)Active trust
D)Testamentary trust

Question 24

Which trust is in the form of a savings account?

A)Totten trust
B)Sprinkling trust
C)Spendthrift trust
D)Constructive trust

Question 25

Which of the following is generally a pre-death task in the administration of a trust?

A)Filing the annual individual income tax returns
B)Opening a checking account for the trust
C)Preparing a schedule of property held outside the trust
D)Requesting discharge as trustee

Question 26

Which is NOT a requirement for an express public trust to be valid?

A)It must limit the distribution of its fund to named individuals.
B)It must benefit the general public or an indefinite class of persons.
C)The settlor must intend to create a public trust.
D)A charitable purpose must be expressly designated.
E)A trustee must be named to administer the trust.

Question 27

Which is NOT a type of resulting trust?

A)Implied trust
B)Purchase-money resulting trust
C)Failed trust
D)Excessive endowment trust

Question 28

Which is NOT a subcategory of express trusts?

A)Implied or nonimplied trusts
B)Private or public trusts
C)Active or passive trusts
D)Inter vivos or testamentary trusts

Question 29

Which function CANNOT be performed by a pour-over will?

A)It can be used independently as a substitute for a will.
B)It can dispose of property that the testator neglected to add to the trust before death.
C)It can dispose of property acquired by the testator through gifts,inheritance,or good fortune shortly before death.
D)It can allow the testator to name a personal guardian for minor children.

Question 30

Which is NOT an advantage of using a revocable living trust as a substitute for a will?

A)The settlor maintains ownership of assets.
B)Publicity is avoided.
C)The need for court-appointed guardians for minors is eliminated.
D)A living trust is not under the control or supervision of the probate court.