NYLE NY Trusts, Wills & Estates 3

Question 1

Under New York EPTL 7-1.17, what are the requirements for a valid revocable (living) trust?

Accepted Answer

A written instrument signed by the settlor designating a trustee, identifying trust property, and stating the trust purposes and beneficiaries

Answer

An oral declaration before two witnesses

Answer

Court approval before the trust takes effect

Answer

Recording with the county clerk's office

Question 2

Under EPTL 11-1.1, what are a fiduciary's (executor/administrator/trustee) primary duties?

Accepted Answer

Duty of loyalty, duty of prudent administration, duty to account, and duty to act impartially among beneficiaries

Answer

Only a duty to distribute assets as quickly as possible

Answer

Only a duty to invest in government bonds

Answer

No specific duties beyond following the decedent's verbal instructions

Question 3

Under New York law, on what grounds may a will be contested?

Accepted Answer

Lack of testamentary capacity, undue influence, fraud, improper execution, or revocation

Answer

Only if a closer relative was omitted from the will

Answer

Only if the will was not notarized

Answer

Contests are not permitted in New York

Question 4

Under the New York Prudent Investor Act (EPTL 11-2.3), what investment standard applies to trustees?

Accepted Answer

A trustee must invest as a prudent investor would, considering the purposes, terms, and circumstances of the trust, with emphasis on total portfolio risk and return

Answer

A trustee must invest only in government bonds and FDIC-insured deposits

Answer

A trustee may invest in any asset regardless of risk

Answer

A trustee must achieve a minimum annual return of 5%

Question 5

Under SCPA 2307, how are fiduciary commissions (compensation) calculated in New York?

Accepted Answer

On a statutory sliding scale based on the value of the estate: 5% on the first $100,000, 4% on the next $200,000, 3% on the next $700,000, 2.5% on the next $4,000,000, and 2% on amounts over $5,000,000

Answer

A flat 10% of the total estate value

Answer

Whatever amount the fiduciary deems reasonable

Answer

No compensation is permitted; fiduciary service is voluntary

Question 6

Under New York EPTL 3-3.7, what is the 'in terrorem' (no-contest) clause and what is its effect?

Accepted Answer

A will provision that disinherits any beneficiary who contests the will; it is generally enforceable in New York with limited exceptions

Answer

A clause that automatically voids the entire will if any beneficiary contests it

Answer

A provision that is never enforceable in New York

Answer

A clause requiring beneficiaries to attend the will reading or forfeit their inheritance