CTFA Practice Questions (missed) 2023 Question & Answers
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Course
CTFA Practice
Institution
CTFA Practice
Which of the following is accomplished when the court of jurisdiction approves a fiduciary's annual accounting? - ANSWERSThe beneficiaries are prevented from objecting later to any conduct of the trustee which was fairly stated in the accounting
You live and work in a state that has adopted the ...
CTFA Practice Questions (missed) 2023
Question & Answers
Which of the following is accomplished when the court of jurisdiction approves a
fiduciary's annual accounting? - ANSWERSThe beneficiaries are prevented from
objecting later to any conduct of the trustee which was fairly stated in the accounting
You live and work in a state that has adopted the UTC. Absent any relevant language in
the instrument, a trust created after adoption of the UTC is considered: -
ANSWERSRevocable and amendable
Unless specifically approved by the bank's board of directors, Regulation 9 prohibits an
employee or officer from: - ANSWERSBeing compensated for acting as a co-trustee
with his employer bank
A client wants to be certain that his family trust will be administered by you, as the trust
advisor. Accordingly, which of the following is appropriate text for the trust instrument? -
ANSWERSThe grantor/testator wishes the trust advisor to be the administrator
assigned to the family trust, as may be practicable
A bank is co-trustee with the widow of the grantor of an irrevocable trust. She is the
income beneficiary and has a limited testamentary power to appoint among the
grantor's descendants. In default of her exercise of this power, the residue goes outright
to the grantor's descendants per stirpes. There are three adult children and no
predeceased children. The account holds a concentration of your bank stock with a
large capital gain. The trust specifically authorizes retention of the bank stock and
provides exculpatory language. The co-trustee wants the trust to retain the bank stock.
To fully protect the trustees from liability, your BEST course of action is to: -
ANSWERSObtain a court order to retain the stock
If a client owns 250 shares of a stock that declares a 2-for-1 stock split, how many
shares will the client own after the split is completed? - ANSWERS500
A client set up a $5,000,000 trust today. The trust provides a yearly payment of 6% of
the value of the property, which is revalued each year. When the client dies, the
property that is in the trust goes to Hofstra University. Which of the following types of
trusts has the client created? - ANSWERSCharitable remainder unitrust
A client established a trust several years prior to his death. The trustee named in the
document has died and the trust is silent with regard to successor trustees. Which of the
following is the MOST appropriate outcome? - ANSWERSBeneficiary petitions the court
, How are credit shelter trusts impacted by the portability of the estate tax exemption? -
ANSWERSThey may still be the basis of good planning
A client established a private foundation 10 years ago. At a local gala, the client very
publicly makes a personal pledge of a significant gift to a nonprofit organization. The
following week, the client instructs the trustee of the foundation to make the gift to the
nonprofit to fulfill the pledge. Is the distribution permissible? - ANSWERSNo; the
distribution would be considered a fulfillment of the debt of a disqualified person, subject
to self-dealing excise taxes
What can a successor corporate trustee be held liable for? - ANSWERSAny act or
failure of the predecessor individual or corporate trustee; prior to accepting an
appointment as successor, a trustee should investigate the actions of its predecessor to
verify compliance with the trust instrument and applicable provisions of local law.
For alternative minimum tax purposes, the preference amount on a gift of tangible
personal property used for a charitable organization's exempt purposes is: -
ANSWERS0
A $10,000 bond is issued with a duration of 4 years. Six months later interest rates fall
by 50 basis points. With the change in interest rates, the bond's value will change to: -
ANSWERS10200
Amy executed a charitable lead annuity trust with your bank as trustee. The trust
terminates at the death of the survivor of Amy, her daughter, and her grandson. The
estate tax consequence is that the assets will: - ANSWERSNot be taxed at any
generation; By gifting assets to the CLAT, the charity receives regular payments until
the death of the grantor. In doing so, these assets are thereby removed from the
descendant's taxable estate.
Which of the following is a significant advantage that a home equity line of credit
typically offers compared to what is offered by an unsecured credit line? -
ANSWERSInterest deductibility
How are capital gains treated when an asset is sold by a grantor to an intentionally
defective grantor trust (IDGT)? - ANSWERSNo capital gain is recognized
A broker holds Jim's stock in custody. Jim gives his broker instructions to transfer the
stock to Nancy. The gift is complete when: - ANSWERSThe stock is transferred on the
books of the corporation
A client owns a co-op in a high-quality apartment complex. The bank has loaned them
$30,000 to make extensive improvements to the unit, including track lighting, new
kitchen appliances, wood paneling, and oak bookshelves. The BEST way for the client
to protect these items is to: - ANSWERSPurchase additions and alterations coverage.
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