CPB CPB Estate Planning & Trust Services

Question 1

What is the primary purpose of a revocable living trust in a private banker's estate planning toolkit?

Accepted Answer

Avoid probate and provide seamless asset management continuity at incapacity or death

Answer

Reduce estate taxes by removing assets from the taxable estate

Answer

Protect assets from creditor claims and lawsuits

Answer

Generate tax-free income for beneficiaries during the grantor's lifetime

Question 2

When a client dies without a valid will, which legal framework determines how their assets are distributed?

Accepted Answer

Intestate succession laws of the state where the decedent resided

Answer

A power of attorney designated during lifetime

Answer

A living will or advance directive

Answer

Beneficiary designations on all accounts

Question 3

Which trust vehicle is most commonly used to hold life insurance policies outside of the insured's taxable estate?

Accepted Answer

Irrevocable Life Insurance Trust (ILIT)

Answer

Revocable living trust

Answer

Blind trust

Answer

Charitable lead annuity trust

Question 4

What is a pour-over will in estate planning?

Accepted Answer

A will that automatically transfers any probate assets into an existing trust at the testator's death

Answer

A will that directs assets to charitable organizations

Answer

A will designating multiple co-equal beneficiaries

Answer

A revocable will that contains no trust provisions

Question 5

In a trust arrangement, what is the primary legal duty of a trustee?

Accepted Answer

To manage and administer trust assets prudently for the benefit of the named beneficiaries

Answer

To ultimately inherit any remaining trust assets after the trust terminates

Answer

To draft the trust document and its amendments

Answer

To contest the trust if terms seem unfavorable

Question 6

Which estate planning trust is specifically designed to protect a beneficiary's inheritance from being seized by their creditors or in a divorce?

Accepted Answer

Spendthrift trust

Answer

Simple testamentary will

Answer

Revocable living trust

Answer

Power of attorney