IN Bar Wills Trusts and Estates 3

Question 1

To create a valid express trust in Indiana, which element is NOT required?

Accepted Answer

Consideration paid by the beneficiary

Answer

A trust is a gratuitous transfer, so consideration is not required, while intent, res, and an ascertainable beneficiary or charitable purpose are.

Question 2

Under the Indiana Trust Code, a trust of real property is enforceable only if:

Accepted Answer

Its terms are evidenced by a writing signed by the settlor or the settlor's authorized agent

Answer

Indiana requires trusts of real property to be evidenced by a signed writing, satisfying the Statute of Frauds.

Question 3

A settlor creates an irrevocable spendthrift trust in Indiana for his daughter. Which creditor can nonetheless reach the daughter's interest?

Accepted Answer

A claimant holding a child support order against the daughter

Answer

Spendthrift protection in Indiana generally yields to claims for child support (and certain other exception creditors), but not to ordinary contract or tort creditors.

Question 4

An Indiana trustee invests the entire trust corpus in a single speculative tech startup, which fails. Under the prudent investor rule, the trustee is most likely liable because:

Accepted Answer

The trustee failed to diversify the trust investments absent special circumstances

Answer

Indiana's prudent investor rule requires diversification unless the trustee reasonably determines the trust is better served without it, and investments are judged as part of the overall portfolio.

Question 5

In Indiana, a revocable trust can be revoked by the settlor:

Accepted Answer

Only if the power to revoke is reserved in the trust instrument, since Indiana trusts are presumed irrevocable absent contrary terms

Answer

Unlike the UTC default, Indiana presumes a trust is irrevocable unless the settlor expressly reserves the power to revoke or modify.

(IN Bar) Indiana Bar Exam Practice Test

(IN Bar) Indiana Bar Exam Practice Test

IN Bar Wills Trusts and Estates 3