Trust Admin.

Question 1

A private trustee cannot do these three things:

Answer 1

Buy or sell trust assets to itself

Borrow trust funds

Sell assets from one trust to another

Question 2

A corporate trustee can/cannot purchase its own stock as a trust investment.

Answer 2

Cannot

Question 3

A corporate trustee can/cannot retain its own stock if a part of the original trust property.

Answer 3

Can

Question 4

6 Elements of the Prudent Investor Rule

Answer 4

Duty not to commingle

Duty to balance return with potential risk

Duty to diversify investments

Duty to keep trust productive

Duty to delegate investment decisions ONLY as permitted by state

Duty to participate in trust admin

Question 5

To whom can a trustee delegate investment decisions in PA? What must be true

Answer 5

To an agent PROVIDED the trustee uses reasonable care in the selection

Question 6

When does PA allow for trust admin. decision by majority rule?

Answer 6

When 3 or more trustees

Question 7

Whenever the trustee, custodian, guardian, or personal rep breaches a fiduciary duty (self-dealing, improper investment, etc), the beneficiary has 3 options

Answer 7

Ratify the transaction and waive the breach

Sue for the resulting loss (called surcharge)

Trace and recover the property of the trust (in a self-dealing case)