Deck 8: Trusts

Question 1

Without a beneficiary, a trust cannot exist.

Answer 1

True

Question 2

When the settlor dies, the dispositive provisions of a revocable living trust become irrevocable.

Answer 2

True

Question 3

Parol (oral) trusts dealing with personal property generally are not enforceable.

Answer 3

False

Question 4

A trust in which the settlor transfers the equitable title to the trust property to someone else and retains the legal title is called a(n)

A) testamentary trust.
B) declaration of trust.
C) inter vivos trust.
D) conveyance in trust.

Question 5

As part of their fiduciary duty, trustees

A) cannot profit personally from the trust property.
B) cannot commingle trust property with their own property.
C) must treat their beneficiaries fairly.
D) All of the answers are correct.

Question 6

Equitable title also is known as beneficial title.

Question 7

Under many state laws, trusts dealing with real property must be in writing.

Question 8

When a trust is created by a conveyance in trust, the settlor transfers legal title to someone else.

Question 9

When a trust is created, the trustee receives the equitable title to the property.

Question 10

A trust in which the trust property is bequeathed or devised in a will to a trustee for the benefit of a beneficiary is called a(n)

A) precatory trust.
B) resulting trust.
C) testamentary trust.
D) inter vivos trust.

Question 11

A testamentary trust is a trust expressing a wish; it is advisory only and not legally binding in most situations.

Question 12

A living trust is under the control and supervision of the probate court after the death of the testator.

Question 13

In an express trust, the intention must be apparent that the legal title be vested in one person is to be held in some manner or for some purpose on behalf of another.

Question 14

A trust that is created by words of entreaty, request, desire, or recommendation is called a(n)

A) precatory trust.
B) resulting trust.
C) pour-over trust.
D) inter vivos trust.

Question 15

Property held in trust is called

A) the trust res.
B) the trust corpus.
C) the trust fund.
D) All of the answers are correct.

Question 16

A pour-over trust is considered to be a testamentary trust because it receives its assets from a will.

Question 17

A sole trustee of a trust also can be the sole beneficiary of that trust.

Question 18

No particular words, such as "trust" or "trustee," are required to create an express trust.

Question 19

A living trust may be funded or unfunded while the settler is alive.

Question 20

An implied trust for real property must be in writing.

Question 21

A provision in a will in which the testator leaves a gift to the trustee of an existing living trust is called a

A) pour-over trust.
B) precatory trust.
C) resulting trust.
D) constructive trust.

Question 22

A trust that is implied from the intention of the parties that the person holding legal title is holding it for another's benefit is called a

A) pour-over trust.
B) precatory trust.
C) resulting trust.
D) constructive trust.

Question 23

A trust can be altered, amended, or revoked

A) at any time.
B) at the death of the settlor.
C) only if the power to do so is expressed in the trust instrument.
D) None of the answers is correct.

Question 24

A trust that becomes effective during the settlor's lifetime is a(n)

A) precatory trust.
B) express trust.
C) testamentary trust.
D) inter vivos trust.

Question 25

A trust that is created by operation of law when someone obtained legal title to property through fraud is called a

A) pour-over trust.
B) precatory trust.
C) resulting trust.
D) constructive trust.

Question 26

A trust that is used to eliminate the trust property from the settlor's gross estate is a(n)

A) implied trust.
B) irrevocable living trust.
C) revocable living trust.
D) precatory trust.

Question 27

Which of the following is a true statement?

A) A sole beneficiary may not be a cotrustee with others.
B) Trusts are allowed for the benefit of animals.
C) The beneficiary needs to be in existence when the trust is created.
D) Trustees do not have a fiduciary duty with their beneficiaries.

Question 28

The trust agreement does NOT

A) spell out the duties and powers of the trustee.
B) describe the trust property.
C) give directions for the distribution of the principal and income.
D) convey equitable title to the trustee.

Question 29

When can an individual act as a trustee?

A) When the individual has capacity to manage her own affairs.
B) When the individual also is named as a beneficiary.
C) When the individual is related to the settlor.
D) When the individual is nominated for the position.

Question 30

A person who sets up a trust by providing money or property for it is known as

A) a trustor.
B) a donor.
C) a grantor.
D) All of the answers are correct.