Practice Test Geeks(CES) Certified Estate and Trust Specialist Practice Test
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Ethics & Legal Compliance 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 Ethics & Legal Compliance flashcards as text

  1. A CES professional learns that a colleague is recommending unsuitable estate planning products to elderly clients to earn higher commissions. What is the ethically required response?

    Answer: Report the misconduct to the appropriate regulatory or firm compliance authority

    Ethical standards require practitioners to report known misconduct that harms clients, not merely avoid it personally.

  2. Under UPIA (Uniform Prudent Investor Act), a trustee must balance which two primary considerations when managing trust investments?

    Answer: Risk and return in the context of the trust's overall purpose

    UPIA requires trustees to balance risk and return relative to the trust's purposes and beneficiaries' needs.

  3. A trustee who fails to diversify trust assets without a specific reason to do so may be held liable for which type of breach?

    Answer: Breach of the prudent investor standard

    The prudent investor standard includes a duty to diversify unless circumstances of the trust dictate otherwise.

  4. When a CES practitioner becomes aware of a client's diminished mental capacity, what is the primary ethical obligation?

    Answer: Continue normal service while documenting capacity concerns and consulting with appropriate parties

    Practitioners must document concerns, consider involving qualified parties (e.g., healthcare professionals or attorneys), and act in the client's best interest.

  5. Which ethical principle prohibits a CES professional from using confidential client information for personal financial gain?

    Answer: Duty of loyalty

    The duty of loyalty requires professionals to place client interests first, prohibiting self-dealing with confidential information.

  6. A trust document is silent on whether the trustee can hire a professional investment manager and pay management fees from trust assets. What governs this situation?

    Answer: State trust law and the prudent investor standard generally permit delegation to qualified agents

    Modern trust law under UPIA and UTC permits trustees to delegate investment functions to qualified professionals under a prudent investor framework.

  7. Under the attorney-client privilege concept as applied to estate planning, which party generally holds the privilege in a trust after the grantor's death?

    Answer: The successor trustee on behalf of the trust

    After death, the successor trustee generally holds the privilege for communications related to trust administration.