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

The duty to segregate assets requires trustees to keep trust property separate from their personal assets to avoid confusion and protect beneficiaries.

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

The UTC requires trustees to provide annual accountings to qualified beneficiaries, though the trust document can modify this requirement.

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

A GRAT allows the grantor to receive fixed annuity payments for a set term, and any remaining assets pass to heirs with reduced gift tax exposure.

Question 4

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

Accepted Answer

Trust corpus (principal) under management

Answer

Corporate trustee fees are generally based on the trust's principal under management, often expressed as a basis-point annual charge.

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

The Uniform Prudent Investor Act replaced the older prudent man rule with a modern portfolio theory approach focusing on total return and risk-adjusted performance.

(AEP) Accredited Estate Planner Practice Test

(AEP) Accredited Estate Planner Practice Test

AEP AEP Trust Administration & Management