AFSB 153 Chapter 6 Review Questions and Answers with Complete Solutions
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Module
AFSB 153
Institution
AFSB 153
AFSB 153 Chapter 6 Review Questions
and Answers with Complete Solutions
Describe the general guarantee under a fiduciary bond - Guarantees
the principal will faithfully perform all duties prescribed by law or by the
courts and will demonstrate financial responsibility for the benefit of another...
Describe the general guarantee under a fiduciary bond - ✔✔Guarantees
the principal will faithfully perform all duties prescribed by law or by the
courts and will demonstrate financial responsibility for the benefit of another
individual or entity.
What are the 5 common responsibilities of fiduciaries? - ✔✔1.
Administering property or managing financial matters.
2. Promptly advise distributies of fiduciary appointments
3. Prepare and file an inventory and valuation of decedents property
4. Take possession of the estate or leave it with the party to be determined
5. Take the steps that are reasonably necessary to manage, protect, and
preserve the estate.
Describe the authority of fiduciaries in handling an estate. Can they hire
anyone? Does this need approval? - ✔✔Fiduciaries can perform the
decedents or other beneficiaries contract, prosecute and settle claims, and
set or propose reasonable admin fees for themselves and others. When
,appropriate appropriate, fiduciaries can hire lawyers, accountants,
managers and others to assist. Court must approve of significant
discretionary actions.
What are 3 breaches of duty for which a fiduciary can be held liable? -
✔✔1. Failure to deal with trust assets in a prudent manner.
2. Failure to use special skills for which the fiduciary was appointed.
3. Dealing with insiders or others for personal benefit.
Describe the purposes of the Uniform Probate Code - ✔✔Reduces the cost
of estate administrators by eliminating the need for fiduciary bonds in most
states.
When does the Uniform Probate Code (UPC) require a fiduciary bond? -
✔✔UPC Requires a fiduciary bond only when a will requires one, a 3rd
party with a financial interests in the estate requests on, or a special
fiduciary is appointed
What are the 7 fiduciary Classifications identified by the Surety & Fidelity
Association of America (SFAA)? - ✔✔1. Bonds in estates of deceased
persons or persons presumed dead because of long absence.
2. Bonds in estates of minors
3. Bond in estates of incompetents
, 4. Bonds in trust estates
5. Bonds in bankruptcy proceedings filed in the US District Courts
6. Bonds in equity courts or courts exercising equitable jurisdiction
7. Miscellaneous fiduciary bonds
Identify the 7 major duties of administrators and executors - ✔✔1. Give
notice to the creditors
2. Collect estate assets
3. Complete inventory of the estates
4. Pay claims against the estate
5. Account for all receipts, disbursements and Assets managed
6. Distribute estate assets
7. Apply to court for discharge of admin duties
What/who is an administrator de bonis non (d.b.n) - ✔✔Individual
appointed by a probate court to replace an original admin who died,
resigned, or was discharged before completing the estate administration.
What is the role of an administrator cum testatmento annexo -
✔✔Individual appointed by a probate court to admin the estate of a person
who left a will but failed to appoint an executor, or whose executor did not
meet court approval or declined to serve as executor.
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