AEP AEP Trust Administration & Management

Question 1

A trustee who commingles trust assets with personal assets has breached which core fiduciary duty?

Accepted Answer

Duty to segregate assets

Answer

Duty of loyalty

Answer

Duty of prudent investment

Answer

Duty to account

Question 2

Under the Uniform Trust Code, what is the minimum frequency at which trustees must provide accountings to qualified beneficiaries unless the trust provides otherwise?

Accepted Answer

Annually

Answer

Monthly

Answer

Quarterly

Answer

Every 5 years

Question 3

Which type of trust allows the grantor to retain the right to receive a fixed annuity payment for a specified term, with the remainder passing to heirs?

Accepted Answer

Grantor Retained Annuity Trust (GRAT)

Answer

Charitable Remainder Trust

Answer

Qualified Personal Residence Trust (QPRT)

Answer

Intentionally Defective Grantor Trust (IDGT)

Question 4

A corporate trustee's fee is typically calculated as a percentage of which value?

Accepted Answer

Trust corpus (principal) under management

Answer

Annual income distributed

Answer

Beneficiary's net worth

Answer

Grantor's estate value at death

Question 5

Which standard governs how a trustee must invest trust assets under the Uniform Prudent Investor Act?

Accepted Answer

Total return/portfolio approach

Answer

Legal list standard

Answer

Prudent man rule

Answer

Speculation is permitted if disclosed

Question 6

When a trust has both income and remainder beneficiaries, a trustee's primary challenge in investment is to balance which competing interests?

Accepted Answer

Current income distributions vs. preservation of principal for remaindermen

Answer

Short-term gains vs. long-term losses

Answer

Federal vs. state tax obligations

Answer

Liquidity needs vs. tax efficiency