Trusts Quiz 4

Question 1

1. T’s testamentary trust provides as follows: “My spouse, A, is the first income beneficiary, for life. My children, B and C, are the successor income beneficiaries following A’S death. B and C are the sole principal beneficiaries.”

T’s trust did not specify a term for the trust. A died in Year 5. B died in year 6. C died in Year 10. When does the trust terminate?

Answer 1

c. Year 10

Question 2

2. S established a revocable trust and named two existing trusts (which benefitted S’s grandchildren)
   S established an irrevocable inter vivos trust. T is the trustee. B is the beneficiary. S, T, and B all agree that the trust should be terminated. They can terminate the trust without court approval by simply agreeing to do so.
   true or false?

Answer 2

false

Question 3

3. S establishes an inter vivos trust but does not stipulate whether the trust is revocable or irrevocable. Can S revoke the trust?

Answer 3

No

Question 4

4. S established a testamentary trust naming S’s child, C, as income beneficiary. S named S’s grandchild, G, as principal beneficiary. The trust instrument did not stipulate a term. C died 10 years after S. G died 50 years after S. When did the trust terminate?

Answer 4

At C’s death

Question 5

5. S established a testamentary trust naming S’s child, C, as income beneficiary. S named S’s grandchild, G, as principal beneficiary. The trust instrument included the following provision: “Term. The term of this trust shall be for the maximum period allowed by law.” C died 10 years after S. G died 50 years after S. When did the trust terminate?

Answer 5

c. 20 years after S’s death.

Question 6

6. S established an irrevocable inter vivos trust naming A as income beneficiary and B as principal beneficiary. B was named as successor income beneficiary. S gave the trustee (T) the right to terminate the trust, in whole or in part, at any time. T later terminates A’s income interest in the trust. What are the respective interests in the trust following T’s termination of A’s income interest?

Answer 6

c. B is income beneficiary and principal beneficiary.

Question 7

7. S established an irrevocable inter vivos trust for A. A is both principal and income beneficiary. T is the trustee. The trust was established while A was young. The trust is relatively modest in size and now that A is a responsible adult, the trust seems unnecessary. The trust instrument provides that the trust continues for A’s life. Under which of the following circumstances may the trust end early?

Answer 7

a. T can terminate if the value is less than $100,000 and A consents to the termination.

Question 8

8. Which of the following statements is incorrect?

Answer 8

d. A revocable trust cannot be revoked by a later testament executed by the settlor.