VA Bar Wills Trusts and Estates 3

Question 1

Under Virginia law, which element is NOT required for a valid express trust?

Accepted Answer

A written trust instrument

Answer

A trustee capable of holding title

Answer

Ascertainable beneficiaries

Answer

Trust property (res)

Question 2

Under Virginia's Uniform Trust Code, the trustee's duty of loyalty requires the trustee to:

Accepted Answer

Act solely in the interests of the beneficiaries

Answer

Maximize investment returns regardless of risk

Answer

Distribute assets equally among all beneficiaries

Answer

Follow the settlor's original intent even if circumstances change drastically

Question 3

Under Virginia law, a valid spendthrift provision in a trust:

Accepted Answer

Prevents creditors from reaching a beneficiary's interest before distribution

Answer

Protects only against tort creditor claims

Answer

Can be waived by the beneficiary assigning their interest

Answer

Only applies to irrevocable trusts with court approval

Question 4

Under Virginia's prudent investor rule, a trustee investing trust assets must:

Accepted Answer

Consider the portfolio as a whole and diversify

Answer

Evaluate each investment in isolation to avoid loss

Answer

Prioritize capital preservation above all other objectives

Answer

Select only from a statutory 'legal list' of approved investments

Question 5

Which of the following creditors CAN reach a beneficiary's interest in a spendthrift trust in Virginia?

Accepted Answer

A beneficiary's ex-spouse seeking court-ordered child support

Answer

A general unsecured creditor owed a business debt

Answer

A credit card company with a judgment lien

Answer

A hospital seeking payment for elective services

Question 6

A trustee in Virginia breaches the duty of loyalty by:

Accepted Answer

Hiring the trustee's own law firm to provide legal services to the trust without consent

Answer

Delegating investment management to a licensed professional advisor

Answer

Investing in diversified low-cost index funds

Answer

Providing annual accountings to all current beneficiaries

Question 7

Under Virginia's Uniform Trust Code, a noncharitable irrevocable trust may be modified or terminated by:

Accepted Answer

Consent of the settlor and all beneficiaries if the modification is not inconsistent with a material purpose

Answer

Court order only, regardless of the parties' wishes

Answer

The settlor acting alone after trust creation

Answer

A majority vote of beneficiaries without court involvement