CES Documentation & Legal Requirements 2

Question 1

Which document formally appoints a personal representative to administer a decedent's estate when there is a valid will?

Accepted Answer

Letters Testamentary

Answer

Letters Testamentary are issued by the probate court to authorize the executor named in a will to act on behalf of the estate.

Question 2

A trust document contains a 'spendthrift clause.' What is the primary legal effect of this provision?

Accepted Answer

It prevents beneficiaries from assigning their interests to creditors

Answer

A spendthrift clause protects trust assets by preventing beneficiaries from voluntarily or involuntarily transferring their beneficial interest to creditors.

Question 3

Under the Uniform Trust Code, what is the minimum notice period a trustee must generally provide to qualified beneficiaries when accepting trusteeship?

Accepted Answer

60 days

Answer

The UTC requires trustees to notify qualified beneficiaries within 60 days of accepting a trusteeship, providing key terms of the trust.

Question 4

Which type of deed transfers real property into a trust without any warranties of title by the grantor?

Accepted Answer

Quitclaim Deed

Answer

A quitclaim deed conveys only whatever interest the grantor holds without making any title warranties, making it common for transfers into revocable trusts.

Question 5

An estate's executor fails to file the federal estate tax return (Form 706) by the due date without an extension. What is the standard late-filing penalty?

Accepted Answer

5% per month, up to 25% of unpaid tax

Answer

The IRS imposes a failure-to-file penalty of 5% of the unpaid tax for each month (or partial month) the return is late, capped at 25%.

(CES) Certified Estate and Trust Specialist Practice Test

(CES) Certified Estate and Trust Specialist Practice Test

CES Documentation & Legal Requirements 2