STEP Regulatory Framework & Compliance 3

Question 1

Under the Uniform Trust Code (UTC), what is the general statute of limitations for a beneficiary to bring a claim against a trustee after receiving a full accounting?

Accepted Answer

6 months

Answer

UTC Section 1005 provides that a claim against a trustee is barred if not brought within 6 months after the beneficiary receives a final account or report.

Question 2

Which ERISA section imposes fiduciary standards on plan administrators and trustees of employee benefit plans?

Accepted Answer

ERISA Section 404

Answer

ERISA Section 404 establishes the fiduciary duty of prudence, loyalty, and diversification for persons managing employee benefit plan assets.

Question 3

A trust company that holds customer information must comply with which federal law regarding the safeguarding and disposal of consumer financial data?

Accepted Answer

Gramm-Leach-Bliley Act (GLBA)

Answer

The GLBA's Safeguards Rule requires financial institutions to implement security programs to protect customer financial information.

Question 4

For U.S. persons with a financial interest in or signature authority over foreign financial accounts exceeding $10,000, compliance requires annual filing of which report?

Accepted Answer

FinCEN Form 114 (FBAR)

Answer

FinCEN Form 114, the FBAR, must be filed annually by U.S. persons with qualifying foreign account authority or interest.

Question 5

Under FATCA, a foreign financial institution (FFI) that fails to enter into an agreement with the IRS is subject to what withholding rate on U.S.-source payments?

Accepted Answer

30%

Answer

FATCA imposes a 30% withholding tax on U.S.-source payments made to non-compliant foreign financial institutions.

(STEP) Society of Trust and Estate Practitioners Certification Practice Test

(STEP) Society of Trust and Estate Practitioners Certification Practice Test

STEP Regulatory Framework & Compliance 3