ACP Trust Administration & Probate Filing 3

Question 1

A Crummey power in an irrevocable life insurance trust (ILIT) allows beneficiaries to:

Accepted Answer

Withdraw contributions within a defined window to qualify for the annual gift tax exclusion

Answer

Crummey powers give beneficiaries a temporary right of withdrawal, converting contributions into present interests eligible for the annual gift tax exclusion.

Question 2

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?

Accepted Answer

Qualified Personal Residence Trust (QPRT)

Answer

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.

Question 3

The probate court's jurisdiction over a decedent's estate is typically established by the decedent's:

Accepted Answer

Domicile at time of death

Answer

Domicile at death determines which state's court has primary jurisdiction over the decedent's estate and the administration of personal property.

Question 4

Under the Prudent Investor Rule, a trustee's investment decisions are evaluated:

Accepted Answer

Based on the overall portfolio performance in light of the trust's purposes

Answer

The Prudent Investor Rule adopts a total portfolio approach, judging each investment decision in the context of the overall portfolio and trust objectives.

Question 5

A Notice to Creditors published in a local newspaper during probate serves to:

Accepted Answer

Start the claims period after which late claims are barred

Answer

Publication of a Notice to Creditors triggers the statutory claim period, after which creditors who failed to file timely claims are generally barred.

(ACP) Advanced Certified Paralegal Practice Test

(ACP) Advanced Certified Paralegal Practice Test

ACP Trust Administration & Probate Filing 3