CAS Bar Wills Trusts and Estates 3

Question 1

Which of the following is NOT required to create a valid inter vivos trust of personal property under California law?

Accepted Answer

A written trust instrument

Answer

California does not require a writing to create an inter vivos trust of personal property; writing is only required for trusts involving real property under the Statute of Frauds.

Question 2

A spendthrift provision in a trust primarily protects the beneficiary by:

Accepted Answer

Restricting the beneficiary's ability to voluntarily assign the interest and shielding it from most creditors

Answer

A spendthrift clause restrains both voluntary alienation by the beneficiary and involuntary attachment by creditors, protecting the beneficiary's interest until it is actually distributed.

Question 3

A charitable trust created to fund a specific hospital is frustrated when the hospital permanently closes. Under the cy pres doctrine, a California court will most likely:

Accepted Answer

Modify the trust purpose to a charitable use as close as possible to the original intent

Answer

Cy pres allows a court to redirect charitable trust assets to an alternate purpose as close as possible to the settlor's original intent when the specific purpose becomes impossible or impractical.

Question 4

A trustee purchases trust property for personal use without authorization from the beneficiaries or the court. Under California's duty of loyalty, this self-dealing transaction is:

Accepted Answer

Voidable at the election of the beneficiary

Answer

Under California Probate Code §16004, unauthorized self-dealing transactions are voidable at the beneficiary's election, not automatically void, giving the beneficiary the choice to ratify or rescind.

Question 5

Under the Uniform Prudent Investor Act as adopted in California, a trustee's investment decisions are evaluated by:

Accepted Answer

Assessing the overall portfolio strategy in light of the trust's purposes and all beneficiaries' needs

Answer

The Prudent Investor Act adopts a portfolio theory approach, evaluating investment decisions in the context of the overall investment strategy rather than on an asset-by-asset basis.

(CAS Bar) California State Bar Exam Practice Test

(CAS Bar) California State Bar Exam Practice Test

CAS Bar Wills Trusts and Estates 3