Deck 50: Trusts and Wills

Question 1

An express trust may be found if the intent of the grantor to create a trust is unmistakable.

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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.

Question 5

Consideration is necessary in order to enforce a trust.

Question 6

A codicil to the will must be executed with all the formal requirements of a will.

Question 7

If a will was burned in an electrical fire that destroyed the testator's home, it will be presumed to be revoked.

Question 8

The courts may not create implied trusts.

Question 9

A witness to a will who is "interested" will be disinherited or disqualified.

Question 10

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

Question 11

A minor's declaration of trust is voidable.

Question 12

There is no such thing as an irrevocable will.

Question 13

A trust is presumed to be irrevocable unless the grantor reserves the power of revocation.

Question 14

A person's written statement that he is leaving property "to Margaret in full confidence and with hope she will take care of Tina" is too indefinite to create a trust.

Question 15

The death of the beneficiary will generally terminate the trust.

Question 16

A totten trust is revocable by the creator.

Question 17

A trust for the dissemination of a particular political doctrine cannot be a charitable trust.

Question 18

Constructive trusts are generally found where the creator clearly intended a trust to be formed.

Question 19

A resulting trust depends on a contract or agreement as evidenced by the parties' acts.

Question 20

In most states, there is no lower age limit for testators as long as they understand the extent of their property.

Question 21

A photocopy of a will or a will written in pencil would not be valid for probate.

Question 22

A trust for the establishment and maintenance of a museum would be a charitable trust.

Question 23

A will entirely in the handwriting of the testator is called what type of will?

A) Nuncupative.
B) Holographic.
C) Conditional.
D) Codicil.

Question 24

The executor or administrator does not occupy a fiduciary relationship with regard to the estate.

Question 25

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

Question 26

Once a trust is validly created, it is revocable.

Question 27

A totten trust involves a bank account opened by the settlor of the trust.

Question 28

A court will require witnesses' signatures to be proven before a formal decree will be issued allowing the will.

Question 29

As long as a decedent's wishes are clear, the formalities of a will need not be strictly met in order for the will to be valid.

Question 30

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

Question 31

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

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

Question 32

Divorce or marriage will result in a revocation of a will.

Question 33

If a person dies intestate, his property will be:

A) given to his beneficiaries.
B) passed to his children.
C) kept by the state.
D) distributed as prescribed by the state.

Question 34

Taxes imposed at death include:

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 35

An express trust is a trust:

A) established by law through the courts when the parties' conduct seems to warrant the creation of a trust.
B) established by voluntary action.
C) created only by an oral statement.
D) All of these.

Question 36

The owner of legal title to the property in a trust is the:

A) grantor.
B) settlor.
C) beneficiary.
D) trustee.

Question 37

A totten trust may also be referred to as a savings account trust.

Question 38

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:

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

Question 39

A completely handwritten will is valid only if witnessed.

Question 40

Renunciation is a statutory right of a surviving spouse to give up her statutory share in the estate.

Question 41

A statement signed by the required number of witnesses who observe the execution of a valid will is called a(n):

A) validity clause.
B) ambulatory clause.
C) attestation clause.
D) fiduciary clause.

Question 42

An amendment to a will is called a(n):

A) stipulated addition.
B) statutory adjustment.
C) codicil.
D) attestation.

Question 43

Which of the following is/are considered to be conduct to invalidate a will?

A) Duress.
B) Undue influence.
C) Fraud.
D) All of these.

Question 44

The characteristics of a totten trust include:

A) it is a joint bank account opened by the settlor of the trust.
B) it is tentative.
C) transfer of ownership is complete only on the depositor's death.
D) All of these.

Question 45

Almost all jurisdictions require that:

A) express trusts of real property be in writing.
B) trusts have at least four witnesses.
C) an inter vivos trust have at least two trustees.
D) a charitable trust have at least two trustees.

Question 46

Testamentary capacity refers to:

A) the age of the testator.
B) the same capacity as required to contract.
C) the ability to understand the nature and extent of one's property, to appreciate the natural objects of one's bounty, and the ability to formulate an orderly plan of disposition.
D) the influence of others over the testator.

Question 47

Probate is the:

A) reading of a will by a lawyer.
B) actual property given away in a will.
C) process of declaring a person dead.
D) process of managing the distribution of a deceased person's property.

Question 48

Which of the following is true about a constructive trust?

A) It normally contains detailed instructions for the trustee to follow.
B) The court imposes it to redress an injustice.
C) It is revocable by the trustee.
D) It carries out the intentions of the trustee.

Question 49

The characteristics of a spendthrift trust include which of the following?

A) Spendthrift provisions are not valid in most states.
B) Trust creditors can never seize income from a spendthrift trust.
C) A settlor may provide, in a spendthrift trust, that the beneficiary cannot, by assignment or otherwise, impair her rights to receive principal or income.
D) All of these.

Question 50

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

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 51

Which of the following statements about wills is correct?

A) A will must be written on one piece of paper.
B) Another writing may be incorporated by reference into a will.
C) The testator must sign his or her full name.
D) The testator cannot have any "help" in signing a will.

Question 52

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

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

Question 53

A trust will fail for lack of:

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

Question 54

Which of the following will be acceptable as a witness to a will?

A) The testator's spouse.
B) The administrator of the estate.
C) The beneficiary of a testamentary trust.
D) The spouse of a beneficiary.

Question 55

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

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

Question 56

All of the following may, in general, revoke a will by operation of law EXCEPT:

A) subsequent marriage.
B) subsequent divorce.
C) birth of a child.
D) all of these will revoke a will by operation of law.

Question 57

Megan, who has no heirs or next of kin, makes a will leaving her estate to her best friend, Pat. If Megan's will is witnessed by only two instead of three people as required by her state statute, upon her death her estate will:

A) go to Pat without court involvement.
B) escheat to the state.
C) go through probate, at which time the court will try to determine Megan's intent as to disposition and follow that intent.
D) be given to a charity as determined by the probate court.

Question 58

In order to be valid, a will must generally include all but which one of the following?

A) Signature of the testator.
B) A written document.
C) Signatures of witnesses.
D) Signature of the executor.

Question 59

A living will is a document that:

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 60

A trustee has a duty to make proper allocation of benefits and burdens between income beneficiaries and remaindermen. Which of the following statements is true concerning this allocation?

A) Current expenses are chargeable to the remaindermen.
B) Extraordinary expenses are chargeable to the remaindermen.
C) Money paid for the use of trust property is chargeable to the remaindermen.
D) Any profit from the use of trust property is allocated to the remaindermen.

Question 61

The duties of a trustee are:

A) to carry out the purposes of the trust.
B) to act with prudence and care in the administration of the trust.
C) to exercise a high degree of loyalty toward the beneficiary.
D) All of these.

Question 62

In 2000, Boyd created a trust that would become effective on his death. In the trust instrument, Boyd specified that all of the income from his stocks and bonds be used for the benefit of St. John's Hospital and indicated that his brother Chad should administer the trust.
a. What kind of trust is this?
b. What is Boyd with relationship to the trust?
c. What is the corpus of the trust?
d. What is Chad with relationship to the trust?

Question 63

Clarence is the trustee of a trust. With $75,000 of his own money, Clarence purchases a parcel of real estate. Two months later, he sells the parcel to the trust for $150,000 and pockets the profit. Discuss the situation in terms of the duties and powers of the trustee.

Question 64

Which of the following is untrue regarding the revocation of a will?

A) There can be a partial revocation.
B) An inadvertent destruction of a will acts as a revocation.
C) The execution of a second will does not of itself constitute a revocation of an earlier will.
D) Divorce does not ordinarily revoke a will.

Question 65

Under what conditions do courts impose a constructive trust?

Question 66

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

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

Question 67

Darrell executed a will fifteen years ago. Now he has changed his mind about how he wants his estate distributed and who he wants to appoint as executor. Discuss how Darrell may revoke his will.

Question 68

Identify and describe the following types of wills.
a. Holographic
b. Nuncupative
c. Soldiers' and sailors' will

Question 69

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

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 70

For a memorandum to be incorporated into a will, which of the following conditions must be met? The memorandum must be:

A) in writing.
B) in existence when the will is executed.
C) adequately described in the will.
D) All of these.

Question 71

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

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 72

Which of the following is true regarding property distribution upon a person's death intestate?

A) At common law, property lineally ascended to parents if there was no surviving spouse and there were no children.
B) Today, in all states, if there is a surviving spouse, he or she gets the entire estate.
C) Rules of descent vary widely from state to state.
D) All of these.

Question 73

Gail dies intestate leaving two children, Benjamin and Christopher. Her daughter, Anna, died two years earlier. Anna had three children, Carolyn, Jeffrey and Scott. If Gail leaves an estate of $150,000, how much will Jeffrey's share be under the usual statutes of descent and distribution?

A) $0.
B) $30,000.
C) $16,667.
D) $50,000.

Question 74

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

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 75

Dan, a widower, dies intestate. He leaves two surviving children, Joe and Carrie, and two grandchildren who are children of his deceased daughter, Debra. If Joe and Carrie each take one-third of his estate and the grandchildren each take one-sixth of the estate, this is described legally by the statement that:

A) lineal descendants of predeceased children take property per stirpes .
B) lineal descendants take the property per capita .
C) collateral heirs take the property per stirpes .
D) lineal descendants and collateral heirs take the property per capita .

Question 76

In 1995, Jack executed a valid will in which he left his entire estate to the Heart Fund. In 2000, Jack was declared incompetent and committed to an institution. At his death in 2005, his son, Brian, who was his sole survivor, contested the will claiming that Jack was obviously incompetent. Will Brian prevail with this argument? Explain.

Question 77

Each trust has which of the following?

A) Executor.
B) Corpus.
C) Testator.
D) All of these.