Fiduciary Responsibilities & Professional Collaboration Flashcards
7 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 7 Fiduciary Responsibilities & Professional Collaboration flashcards as text
A trustee is considering delegating investment management to an outside investment advisor. Under the UPIA, which action is required to satisfy the duty to delegate prudently?
Answer: Establish a scope of delegation, select the agent with reasonable care, and monitor the agent's performance
Under the UPIA, prudent delegation requires the trustee to define the scope of authority, exercise care in selecting the agent, and monitor the agent's ongoing performance.
An AEP discovers that a client's durable power of attorney grants the agent broad gifting powers with no limitations. This creates which primary estate planning concern?
Answer: The agent may make gifts that deplete the estate and undermine the client's estate plan
Unlimited gifting authority in a DPOA can allow an agent to make gifts that undermine the principal's estate plan, deplete assets, and potentially disinherit intended beneficiaries.
Which of the following scenarios best illustrates a breach of the fiduciary duty of confidentiality in the context of estate planning?
Answer: A trustee discloses a beneficiary's trust interest to a prospective lender without the beneficiary's consent
Disclosing a beneficiary's trust interest to a third party such as a lender without the beneficiary's authorization constitutes a breach of the fiduciary duty of confidentiality.
A client with a blended family asks the AEP team to help structure an estate plan that treats children from a prior marriage differently than children from the current marriage. The team's fiduciary and ethical obligation is to:
Answer: Advise the client of the implications and implement their informed, competent decision
Competent adult clients have the right to distribute their estate as they choose; the professional team's obligation is to ensure the client is fully informed of the consequences and then implement the client's autonomous decision.
Which type of fiduciary standard generally applies to an Accredited Estate Planner providing financial planning advice in their capacity as a fiduciary advisor?
Answer: Best interest standard, requiring advice that places the client's interests above the advisor's own
Fiduciary advisors, including those acting in an AEP capacity, are generally held to a best-interest standard that requires placing the client's interests above their own personal or financial interests.
When multiple professionals in an estate planning team have conflicting recommendations for a client, the most ethical resolution process is to:
Answer: Present all recommendations to the client, explain the trade-offs, and let the client make an informed decision
Ethical collaboration requires presenting the client with the full range of professional views and their respective trade-offs so the client can make a fully informed decision aligned with their values and goals.
An estate trustee is offered a fee by a third-party vendor for referring trust business to that vendor. Accepting this undisclosed fee would violate primarily which fiduciary duty?
Answer: Duty of loyalty
Accepting undisclosed referral fees from vendors creates a personal financial incentive that conflicts with the trustee's obligation to act solely in the beneficiaries' interests, violating the duty of loyalty.