CHAPTER 4 - TRUST BASICS

Question 1

WHAT IS THE ROLE OF A TRUSTEE

Answer 1

HOLDS LEGAL TITLE TO THE PROPERTY AND HAS BOTH THE RIGHT AND THE DUTY TO MANAGE THE PROPERTY FOR THE BENEFIT OF THE BENEFICIARY

Question 2

WHAT IS THE ROLE OF A TRUST BENEFICIARY

Answer 2

EQUITABLE INTEREST IN TRUST PROPERTY.

NO RIGHT TO MANAGE THE PROPERTY, ON;Y THE RIGHT TO THE ECONOMIC BENEFIT OF THE PROPERTY

Question 3

5 ELEMENTS OF A TRUST

Answer 3

SETTLOR
TRUSTEE
BENEFICIARY
PROPERTY
TRUST INSTRUMENT

Question 4

MARITAL TRUST IN WHICH THE BENEFICIARY SPOUSE IS GIVEN AN INCOME INTEREST AT LEAST ANNUALLY

Answer 4

QUALIFIED TERMINABLE INTEREST PROPERTY TRUST (QTIP)

Question 5

WHAT DISBURSEMENTS ARE ALLOWED BY THE QTIP TRUST

Answer 5

PRINCIPAL CAN BE INVADED FOR HEALTH, EDUCATION, MAINTENANCE, AND SUPPORT

PRINCIPAL OF THE GREATER OF 5% OR $5,000 EACH YEAR

ALL INCOME IS ALLOWED TO PASS TO THE BENEFICIARY