AEP AEP Trust Administration & Management 2

Question 1

A Special Needs Trust (SNT) is designed primarily to supplement benefits from which government programs without disqualifying the beneficiary?

Accepted Answer

Medicaid and Supplemental Security Income (SSI)

Answer

An SNT supplements Medicaid and SSI benefits by holding assets for a disabled beneficiary without counting those assets as available resources for program eligibility.

Question 2

Which type of SNT is funded with assets belonging to the disabled beneficiary themselves, such as a personal injury settlement?

Accepted Answer

First-party (d)(4)(A) SNT

Answer

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.

Question 3

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?

Accepted Answer

Exercise any power that a prudent person would exercise given the trust's purpose

Answer

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.

Question 4

A Charitable Remainder Unitrust (CRUT) differs from a Charitable Remainder Annuity Trust (CRAT) in that the CRUT pays the income beneficiary:

Accepted Answer

A fixed percentage of the trust's annually revalued assets

Answer

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.

Question 5

Which document typically governs the administration of a revocable living trust during the grantor's incapacity?

Accepted Answer

The trust agreement itself

Answer

The trust agreement itself contains successor trustee provisions that automatically take effect upon the grantor's incapacity, enabling seamless administration without court intervention.

(AEP) Accredited Estate Planner Practice Test

(AEP) Accredited Estate Planner Practice Test

AEP AEP Trust Administration & Management 2