Deck 13: Classification of Trusts, the Living Trust, and Other Special Trusts

Question 1

MATCHING:
a.active trust
b.inter vivos trust
c.purchase-money resulting trust
d.failed trust
e.excessive endowment trust
f.spendthrift trust
g.sprinkling trust
h.Totten trust
i.declaration of trust
j.irrevocable living trust
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

Answer 1

F

Question 2

MATCHING:
a.active trust
b.inter vivos trust
c.purchase-money resulting trust
d.failed trust
e.excessive endowment trust
f.spendthrift trust
g.sprinkling trust
h.Totten trust
i.declaration of trust
j.irrevocable living trust
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

Answer 2

C

Question 3

MATCHING:
a.active trust
b.inter vivos trust
c.purchase-money resulting trust
d.failed trust
e.excessive endowment trust
f.spendthrift trust
g.sprinkling trust
h.Totten trust
i.declaration of trust
j.irrevocable living trust
A trust that is established when the value of property exceeds the amount needed for the purpose of a private express trust

Answer 3

E

Question 4

All trusts must be either express or implied.

Question 5

A living trust can decrease income taxes.

Question 6

MATCHING:
a.active trust
b.inter vivos trust
c.purchase-money resulting trust
d.failed trust
e.excessive endowment trust
f.spendthrift trust
g.sprinkling trust
h.Totten trust
i.declaration of trust
j.irrevocable living trust
A trust that is declared void for reasons other than that it has an illegal objective

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

MATCHING:
a.active trust
b.inter vivos trust
c.purchase-money resulting trust
d.failed trust
e.excessive endowment trust
f.spendthrift trust
g.sprinkling trust
h.Totten trust
i.declaration of trust
j.irrevocable living trust
An express trust that can be either private or charitable

Question 13

The money in a Totten trust is a probate asset.

Question 14

MATCHING:
a.active trust
b.inter vivos trust
c.purchase-money resulting trust
d.failed trust
e.excessive endowment trust
f.spendthrift trust
g.sprinkling trust
h.Totten trust
i.declaration of trust
j.irrevocable living trust
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 15

Courts frequently use resulting trusts to settle legal disputes.

Question 16

MATCHING:
a.active trust
b.inter vivos trust
c.purchase-money resulting trust
d.failed trust
e.excessive endowment trust
f.spendthrift trust
g.sprinkling trust
h.Totten trust
i.declaration of trust
j.irrevocable living trust
A trust that may not be amended, revoked, or canceled after its creation

Question 17

MATCHING:
a.active trust
b.inter vivos trust
c.purchase-money resulting trust
d.failed trust
e.excessive endowment trust
f.spendthrift trust
g.sprinkling trust
h.Totten trust
i.declaration of trust
j.irrevocable living trust
A trust made between living persons

Question 18

MATCHING:
a.active trust
b.inter vivos trust
c.purchase-money resulting trust
d.failed trust
e.excessive endowment trust
f.spendthrift trust
g.sprinkling trust
h.Totten trust
i.declaration of trust
j.irrevocable living trust
A trust made when a settlor retains title to property and simply declares himself/herself trustee of the property for the benefit of another person

Question 19

MATCHING:
a.active trust
b.inter vivos trust
c.purchase-money resulting trust
d.failed trust
e.excessive endowment trust
f.spendthrift trust
g.sprinkling trust
h.Totten trust
i.declaration of trust
j.irrevocable living trust
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 20

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

Question 21

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 22

Which trust is in the form of a savings account?

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

Question 23

Which is NOT a subcategory of express trusts?

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

Question 24

Which is NOT a type of resulting trust?

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

Question 25

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

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

Question 26

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

A)It can allow the testator to name a personal guardian for minor children.
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 be used independently as a substitute for a will.

Question 27

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 28

Which of the following is a type of implied trust?

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

Question 29

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

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

Question 30

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

A)On the death of the settlor, the living trust becomes irrevocable.
B)It can be used as a device for saving estate taxes
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/herself as trustee.