Trust Administration & Probate Filing Flashcards
7 cards from real ACP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Trust Administration & Probate Filing flashcards as text
A Crummey power in an irrevocable life insurance trust (ILIT) allows beneficiaries to:
Answer: Withdraw contributions within a defined window to qualify for the annual gift tax exclusion
Crummey powers give beneficiaries a temporary right of withdrawal, converting contributions into present interests eligible for the annual gift tax exclusion.
Which type of trust is specifically designed to hold a residence and transfer it to beneficiaries at a reduced gift tax value after a term of years?
Answer: Qualified Personal Residence Trust (QPRT)
A QPRT allows the grantor to transfer a personal residence at a discounted gift tax value by retaining the right to live there for a fixed term.
The probate court's jurisdiction over a decedent's estate is typically established by the decedent's:
Answer: Domicile at time of death
Domicile at death determines which state's court has primary jurisdiction over the decedent's estate and the administration of personal property.
Under the Prudent Investor Rule, a trustee's investment decisions are evaluated:
Answer: Based on the overall portfolio performance in light of the trust's purposes
The Prudent Investor Rule adopts a total portfolio approach, judging each investment decision in the context of the overall portfolio and trust objectives.
A Notice to Creditors published in a local newspaper during probate serves to:
Answer: Start the claims period after which late claims are barred
Publication of a Notice to Creditors triggers the statutory claim period, after which creditors who failed to file timely claims are generally barred.
In a Charitable Remainder Unitrust (CRUT), the annual payment to the non-charitable beneficiary is calculated as:
Answer: A fixed percentage of the trust's fair market value revalued annually
A CRUT pays a fixed percentage of the trust's annually revalued assets, so the dollar amount fluctuates with investment performance.
When a trustee makes an improper distribution to an income beneficiary at the expense of remainder beneficiaries, this most likely violates:
Answer: The duty of impartiality among beneficiaries
The duty of impartiality requires trustees to administer the trust equitably among all beneficiaries, balancing current income interests against remainder interests.