CES Ethics & Legal Compliance 3

Question 1

A CES practitioner receives a gift worth $300 from a grateful estate client. Under most professional ethics codes, what is the best course of action?

Accepted Answer

Accept and disclose it to the firm's compliance department

Answer

Most compliance frameworks require disclosure of gifts above de minimis thresholds; accepting without disclosure is improper.

Question 2

Which federal law imposes a fiduciary standard on financial advisors who manage retirement plan assets within estates?

Accepted Answer

ERISA (Employee Retirement Income Security Act)

Answer

ERISA governs retirement plan assets and imposes strict fiduciary duties on those managing such assets.

Question 3

An estate planning client asks a CES professional to back-date a document to qualify for a tax benefit that has already expired. The practitioner should:

Accepted Answer

Refuse because backdating documents constitutes fraud

Answer

Backdating documents to misrepresent dates for tax purposes is fraudulent and violates both legal and ethical standards.

Question 4

The 'no further inquiry' rule in trust law applies most directly to which situation?

Accepted Answer

When a trustee engages in a transaction that benefits themselves at trust expense

Answer

The no-further-inquiry rule presumes a conflict-of-interest transaction is a breach without requiring proof of actual harm.

Question 5

A CES practitioner suspects a client may be the victim of financial elder abuse by a family member. What is the appropriate first step?

Accepted Answer

Report suspicions to Adult Protective Services or the appropriate authority per applicable law

Answer

Most states require or permit financial professionals to report suspected elder financial abuse to protective services.

(CES) Certified Estate and Trust Specialist Practice Test

(CES) Certified Estate and Trust Specialist Practice Test

CES Ethics & Legal Compliance 3