MT Bar Wills Trusts and Estates 2 — Questions and Answers
Question 1: A revocable living trust in Montana differs from a will primarily in that:
- It takes effect only at death
- It avoids probate and takes effect during the grantor's lifetime (Correct answer)
- It requires court supervision at all times
- It cannot be changed after creation
Correct answer: It avoids probate and takes effect during the grantor's lifetime
A revocable living trust is effective during the grantor's lifetime, allowing assets to pass to beneficiaries without probate, unlike a will which operates only at death through probate.
Question 2: Under Montana trust law, a trustee's fiduciary duty includes:
- Maximizing risk for trust growth
- Loyalty to beneficiaries and prudent management of trust assets (Correct answer)
- Distributing all income annually without exception
- Making decisions based solely on personal investment style
Correct answer: Loyalty to beneficiaries and prudent management of trust assets
Montana trustees owe the duties of loyalty (acting in beneficiaries' best interests) and prudent administration (managing assets as a prudent investor would).
Question 3: In Montana, a spendthrift trust provision protects a beneficiary's interest by:
- Preventing the beneficiary from using trust funds
- Restricting creditors from reaching the beneficiary's interest before distribution (Correct answer)
- Eliminating the trustee's discretion
- Requiring court approval for all distributions
Correct answer: Restricting creditors from reaching the beneficiary's interest before distribution
A spendthrift clause restricts both voluntary assignment by the beneficiary and involuntary attachment by creditors of the beneficiary's interest before it is distributed.
Question 4: Under Montana's UPC, the personal representative of an estate has the duty to:
- Distribute all assets within 30 days of appointment
- Collect the decedent's assets, pay valid debts, and distribute the remainder to beneficiaries (Correct answer)
- Personally guarantee all estate debts
- Sell all real property within the estate
Correct answer: Collect the decedent's assets, pay valid debts, and distribute the remainder to beneficiaries
A Montana personal representative must marshal estate assets, pay taxes and creditor claims, and then distribute the remaining estate to heirs or beneficiaries as directed by the will or intestacy laws.
Question 5: Under Montana's anti-lapse statute, when a beneficiary predeceases the testator:
- The gift always lapses and falls into the residuary estate
- The gift passes to the deceased beneficiary's descendants if they are a relative of the testator (Correct answer)
- The gift reverts to the testator's estate
- The gift is divided equally among surviving beneficiaries
Correct answer: The gift passes to the deceased beneficiary's descendants if they are a relative of the testator
Montana's anti-lapse statute saves gifts to deceased relatives of the testator by substituting the deceased beneficiary's descendants to take the gift.
Question 6: The cy-pres doctrine in Montana trust law allows courts to:
- Revoke charitable trusts that become harmful
- Modify a charitable trust's specific purpose when it becomes impossible or impractical, while preserving the general charitable intent (Correct answer)
- Transfer trust assets to the state when beneficiaries die
- Permit trustees to ignore trust terms when inconvenient
Correct answer: Modify a charitable trust's specific purpose when it becomes impossible or impractical, while preserving the general charitable intent
When a charitable trust's specific purpose becomes impossible or impractical, the cy-pres doctrine allows courts to redirect the trust to a similar charitable purpose to fulfill the settlor's general intent.
MT Bar Wills Trusts and Estates 2
A revocable living trust in Montana differs from a will primarily in that: