OK Bar Wills Trusts and Estates 3

Question 1

Which of the following is required to create a valid private express trust?

Accepted Answer

Intent, identifiable trust property, ascertainable beneficiaries, and a lawful purpose

Answer

A private express trust requires settlor intent, a res, ascertainable beneficiaries, and a valid purpose; a trustee will be supplied if missing.

Question 2

A settlor creates a trust 'for my friends.' The trust most likely fails because:

Accepted Answer

The beneficiaries are not ascertainable

Answer

'Friends' is too indefinite a class, so the trust fails for lack of ascertainable beneficiaries.

Question 3

A spendthrift clause in an Oklahoma trust generally prevents:

Accepted Answer

Beneficiaries from voluntarily or involuntarily transferring their interests before distribution

Answer

A spendthrift provision bars a beneficiary's creditors and assignees from reaching the interest before it is distributed.

Question 4

A trustee of an Oklahoma trust invests all trust assets in a single speculative stock, which loses value. The trustee most likely breached:

Accepted Answer

The duty of prudent investment, including the duty to diversify

Answer

Under prudent investor principles, a trustee must diversify investments and manage the portfolio with reasonable care and caution.

Question 5

A trustee purchases trust property for himself at fair market value without court approval or beneficiary consent. This is:

Accepted Answer

A breach of the duty of loyalty regardless of fairness, under the no-further-inquiry rule

Answer

Self-dealing by a trustee is a per se breach of loyalty, and fairness of the price is no defense under the no-further-inquiry rule.

(OK Bar) Oklahoma Bar Exam Practice Test