Bar Exam Bar Exam Wills, Trusts & Estates 2

Question 1

Which of the following is NOT a required element for a valid express trust?

Accepted Answer

A written instrument signed before a notary public

Answer

A trustee with legal capacity

Answer

Trust property (res) transferred to the trust

Answer

A definite beneficiary or charitable purpose

Question 2

A spendthrift clause in a trust instrument is designed primarily to:

Accepted Answer

Prevent beneficiaries from alienating their interest and creditors from reaching it before distribution

Answer

Allow the trustee to terminate distributions if a beneficiary is irresponsible

Answer

Limit distributions to amounts actually needed for support or education

Answer

Require court approval before any invasion of trust principal

Question 3

Under the Uniform Trust Code, the trustee's duty of loyalty requires the trustee to:

Accepted Answer

Administer the trust solely in the interest of the beneficiaries, avoiding conflicts of interest

Answer

Maximize investment returns regardless of risk to principal

Answer

Treat all current and remainder beneficiaries with strict equality

Answer

Follow the settlor's instructions even if compliance harms the beneficiaries

Question 4

Under the cy pres doctrine, a court modifies a charitable trust when the charitable purpose becomes:

Accepted Answer

Impossible, impractical, or illegal to fulfill

Answer

More expensive than the settlor originally anticipated

Answer

Less fashionable or no longer preferred by the community

Answer

Partially accomplished and surplus funds remain

Question 5

A resulting trust arises by operation of law when:

Accepted Answer

An express trust fails entirely or does not exhaust all trust property

Answer

A trustee wrongfully acquires property from a beneficiary through undue influence

Answer

A trustee breaches the duty of loyalty by engaging in self-dealing

Answer

A beneficiary dies before the trust terminates and no alternate taker is named

Question 6

A revocable living trust typically becomes irrevocable upon:

Accepted Answer

The settlor's death as specified in the trust instrument

Answer

The transfer of the first significant asset into the trust

Answer

Execution and signing of the trust agreement by the settlor

Answer

Registration of the trust instrument with the probate court