AEP Trust Administration & Management Flashcards
6 cards from real AEP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 AEP Trust Administration & Management flashcards as text
A Special Needs Trust (SNT) is designed primarily to supplement benefits from which government programs without disqualifying the beneficiary?
Answer: Medicaid and Supplemental Security Income (SSI)
An SNT supplements Medicaid and SSI benefits by holding assets for a disabled beneficiary without counting those assets as available resources for program eligibility.
Which type of SNT is funded with assets belonging to the disabled beneficiary themselves, such as a personal injury settlement?
Answer: First-party (d)(4)(A) SNT
A first-party SNT under 42 U.S.C. §1396p(d)(4)(A) is funded with the beneficiary's own assets and must include a Medicaid payback provision at death.
A trustee discovers a trust document is silent on a specific administrative power needed to manage trust assets. Under the Uniform Trust Code, what is the trustee permitted to do?
Answer: Exercise any power that a prudent person would exercise given the trust's purpose
The UTC grants trustees implied administrative powers that a prudent person would exercise to carry out the trust's purposes, even if not expressly listed in the document.
A Charitable Remainder Unitrust (CRUT) differs from a Charitable Remainder Annuity Trust (CRAT) in that the CRUT pays the income beneficiary:
Answer: A fixed percentage of the trust's annually revalued assets
A CRUT pays a fixed percentage of the trust's fair market value as revalued annually, so payments fluctuate with asset performance, unlike the fixed-dollar CRAT.
Which document typically governs the administration of a revocable living trust during the grantor's incapacity?
Answer: The trust agreement itself
The trust agreement itself contains successor trustee provisions that automatically take effect upon the grantor's incapacity, enabling seamless administration without court intervention.
A trust protector's primary role in a modern irrevocable trust is to:
Answer: Hold certain powers to modify the trust to respond to changing law or circumstances
A trust protector holds reserved powers (such as to amend, decant, or change situs) to adapt the irrevocable trust to unforeseen changes in law or family circumstances.