Section II. Formal Requisites of Establishing an Account

Question 1

1. Before accepting a trust account, a bank trustee should undertake a _________ process to check out everything about the account, including its history, purpose, beneficiaries, legitimacy, eligibility for deposit insurance coverage, and whether the institution has the necessary expertise and resources to adequately serve the account as fiduciary,
   a. funding
   b. due diligence
   c. probate
   d. vetting

Answer 1

a.

Question 2

2. What is the effect of a beneficiary disclaiming his or her interest in a trust.
   a. The beneficiary’s interest goes to his or her estate
   b. The beneficiary’s interest passes to his or her children
   c. The beneficiary’s interest passes according to the terms of the trust as through the beneficiary had died.
   d. The trust terminates.

Answer 2

c.

Question 3

d. Which of the following is NOT a condition that may result in a vacancy in the office of trustee?
a. Death of an individual trustee
b. Dissolution of a corporate trustee
c. Death of a trust officer employed by a corporate trustee
d. Removal of a trustee

Answer 3

c.

Question 4

4. When is it impossible for a person or corporation appointed as trustee under the governing instrument of a trust to disclaim that appointment?
   a. After the trustee has accepted the appointment
   b. After the trustee has refused to act as trustee, and a reasonable time has passed
   c. After the trustee has read the terms of the trust
   d. After the trustee has discussed the appointment with the beneficiaries.

Answer 4

a.

Question 5

5. Which of the following is NOT one of the common law grounds for removal of a trustee?
   a. Disregard of trust terms
   b. Trustee is a non-US citizen
   c. Legal incapacity of the trustee
   d. Unauthorized compensation

Answer 5

b.

Question 6

6. Which of the following statements is true?
   a. The appointment of a successor trustee always requires the consent of the beneficiaries.
   b. A successor trustee must always post a bond.
   c. A successor trustee must be named in the trust document.
   d. A successor trustee generally may excercise all of the powers granted to the original trustee.

Answer 6

d.

Question 7

7. After having accepted the office of trustee, a trustee may disclaim its acceptance in which of the following ways:
   a. By a formal, written disclaimer
   b. By a refusal to act
   c. By verbal or written communicaiton to the beneficiary
   d. None of the above

Answer 7

d.