Ethical Standards & Professional Conduct Flashcards
7 cards from real CES practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Ethical Standards & Professional Conduct flashcards as text
A CES professional simultaneously represents both the settlor and the primary beneficiary in drafting a trust. This situation MOST likely creates:
Answer: A dual agency conflict of interest requiring disclosure and consent
Representing parties with potentially divergent interests creates a conflict of interest that requires full disclosure and informed consent from all parties before proceeding.
A CES professional serving as corporate trustee is offered a gift by a trust vendor. The MOST appropriate response is to:
Answer: Decline the gift and disclose the offer per firm policy to avoid the appearance of impropriety
Accepting gifts from trust vendors can compromise objectivity and the appearance of impartiality; declining and disclosing per firm policy is the ethical standard.
Which of the following BEST illustrates the duty of prudence in estate administration?
Answer: Following a systematic asset allocation strategy aligned with the trust's investment policy statement
The duty of prudence requires trustees to follow a systematic, disciplined investment process consistent with the trust's objectives and an investment policy statement.
A CES professional who is also a licensed attorney is asked to provide both legal and financial advice within the same engagement. Ethically, the professional should:
Answer: Clearly define the scope of each role and obtain separate informed consent for each
When serving in dual professional roles, the practitioner must clearly delineate each role's scope and obtain informed consent to avoid confusion about duties and liability.
When terminating a professional relationship with a trust client, a CES professional's primary ethical obligation is to:
Answer: Provide reasonable notice and assist with transition to avoid prejudicing the client's interests
Upon terminating a client relationship, the professional must provide reasonable notice and facilitate a smooth transition to prevent harm to the client's ongoing interests.
A CES professional discovers a material error in a trust accounting that was previously provided to beneficiaries. The ethical course of action is to:
Answer: Promptly disclose the error to beneficiaries and provide a corrected accounting
Material errors in trust accountings must be promptly disclosed and corrected, as honesty and transparency are fundamental fiduciary obligations.
Under professional conduct standards, which situation would MOST require a CES professional to withdraw from an engagement?
Answer: A client who insists the professional assist in falsifying estate documents
A client's insistence on participating in document falsification is an illegal act that ethically compels the professional to withdraw from the engagement.