CES CES Beneficiary Rights & Distribution Planning

Question 1

Under the Uniform Trust Code, which right allows a beneficiary to receive information about the trust and its administration from the trustee?

Accepted Answer

Right to an accounting

Answer

Right of subrogation

Answer

Right of redemption

Answer

Right of rescission

Question 2

A discretionary trust gives the trustee sole authority over distributions. Which standard best protects a beneficiary challenging an improper distribution denial?

Accepted Answer

Abuse of discretion standard

Answer

Reasonable person standard

Answer

Strict liability standard

Answer

Negligence per se standard

Question 3

What is a 'spendthrift provision' designed to do in a trust?

Accepted Answer

Prevent beneficiaries from transferring their interest to creditors

Answer

Increase the rate of mandatory distributions

Answer

Allow beneficiaries to withdraw principal at any time

Answer

Require annual distribution of all income

Question 4

Which type of beneficiary holds a present, legally enforceable interest in a trust?

Accepted Answer

Current income beneficiary

Answer

Contingent beneficiary

Answer

Remainder beneficiary

Answer

Successor beneficiary

Question 5

When a trust document is silent on the frequency of distributions, what obligation does a trustee typically have regarding income?

Accepted Answer

Distribute income at reasonable intervals, often quarterly or annually

Answer

Distribute income annually at fiscal year-end

Answer

Retain all income until trust termination

Answer

Distribute income only upon beneficiary request

Question 6

Which planning tool allows a beneficiary to redirect trust distributions to another beneficiary or charity without triggering a taxable gift?

Accepted Answer

Disclaimer

Answer

Crummey power

Answer

Power of appointment

Answer

Unitrust conversion