CA Fiduciary Professional Practices Exam with precise
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detailed solutions ||
Duty of Loyalty || ||
A fiduciary duty owed by an agent not to act adversely to the interests of the principal
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Conflict of interest || ||
A conflict between self-interest and professional obligation
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Personal conflict of interest || || ||
Having a personal stake with the client (i.e. Sharing assets)
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Direct conflict of interest
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Having services in direct conflict of interests to client or proposed client (i.e. representing two
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different trusts competing for similar assets)
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Indirect conflict of interest || || ||
Typically includes professionals by which the fiduciary hires with interests, or has clients with
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interests, in conflict of the client's interest. This can be waived if all involved parties agree.
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,What are several practices to reduce conflict of interest?
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Having attorney's review operative documents, listing closely held business and investment
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interests, and maintaining a client and beneficiary database. || || || || || || ||
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How may an attorney be a conflict of interest?
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By witnessing how the trust is administered, representing a family member of the client, or be
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witness to how the assets were managed. || || || || || ||
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How may a client be a conflict of interest?
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By having a privacy issue, disclosed confidential information, and committing loyalty to them
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over beneficiaries or estates over them (a fiduciary should always remain neutral and fair to all
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parties).
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Should a fiduciary do what a client wants or what is in their best interest?
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A fiduciary should commit to decisions for what is in the client's best interest.
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When in doubt, what should the fiduciary do when uncertain if an action is legal/to code?
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The fiduciary should seek court approval.
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Who should the fiduciary be loyal to: the beneficiaries, the estate, or to the client?
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, None of them. The fiduciary should treat everyone equally and remain neutral.
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In basic line of work, where complex issues arise in a conservatorship, in a trust or estate, what
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should a fiduciary do? || || ||
Hire professionals to assist, ascertain what documents are available for trusts (i.e. for taxes, asset
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marshaling, etc.), and making sure to have a starting point. || || || || || || || || ||
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What is important in understanding a client?
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Understand the client's background, where they are coming from. || || || || || || || ||
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Under general principles of California's code of ethics, part (b)--
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The fiduciary shall obey all local, state, and federal laws, regulations, and requirements by the
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courts.
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Under general principles of California's code of ethics, part (a)--
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The fiduciary shall maintain relations (as appropriate) with a conservatee, ward, principal, and
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beneficiary as appropriate to appointment. || || || ||
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As general rule, regarding decision making capacity of the client--
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The fiduciary shall allow reasonable opportunity for the client to exercise his or her own choices
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as they are capable of.
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detailed solutions ||
Duty of Loyalty || ||
A fiduciary duty owed by an agent not to act adversely to the interests of the principal
|| || || || || || || || || || || || || || || ||
|| || ||
Conflict of interest || ||
A conflict between self-interest and professional obligation
|| || || || || ||
|| || ||
Personal conflict of interest || || ||
Having a personal stake with the client (i.e. Sharing assets)
|| || || || || || || || ||
|| || ||
Direct conflict of interest
|| || ||
Having services in direct conflict of interests to client or proposed client (i.e. representing two
|| || || || || || || || || || || || || || ||
different trusts competing for similar assets)
|| || || || ||
|| || ||
Indirect conflict of interest || || ||
Typically includes professionals by which the fiduciary hires with interests, or has clients with
|| || || || || || || || || || || || || ||
interests, in conflict of the client's interest. This can be waived if all involved parties agree.
|| || || || || || || || || || || || || || ||
|| || ||
,What are several practices to reduce conflict of interest?
|| || || || || || || ||
Having attorney's review operative documents, listing closely held business and investment
|| || || || || || || || || || ||
interests, and maintaining a client and beneficiary database. || || || || || || ||
|| || ||
How may an attorney be a conflict of interest?
|| || || || || || || ||
By witnessing how the trust is administered, representing a family member of the client, or be
|| || || || || || || || || || || || || || || ||
witness to how the assets were managed. || || || || || ||
|| || ||
How may a client be a conflict of interest?
|| || || || || || || ||
By having a privacy issue, disclosed confidential information, and committing loyalty to them
|| || || || || || || || || || || || ||
over beneficiaries or estates over them (a fiduciary should always remain neutral and fair to all
|| || || || || || || || || || || || || || || ||
parties).
|| || ||
Should a fiduciary do what a client wants or what is in their best interest?
|| || || || || || || || || || || || || ||
A fiduciary should commit to decisions for what is in the client's best interest.
|| || || || || || || || || || || || ||
|| || ||
When in doubt, what should the fiduciary do when uncertain if an action is legal/to code?
|| || || || || || || || || || || || || || ||
The fiduciary should seek court approval.
|| || || || ||
|| || ||
Who should the fiduciary be loyal to: the beneficiaries, the estate, or to the client?
|| || || || || || || || || || || || || ||
, None of them. The fiduciary should treat everyone equally and remain neutral.
|| || || || || || || || || || ||
|| || ||
In basic line of work, where complex issues arise in a conservatorship, in a trust or estate, what
|| || || || || || || || || || || || || || || || || ||
should a fiduciary do? || || ||
Hire professionals to assist, ascertain what documents are available for trusts (i.e. for taxes, asset
|| || || || || || || || || || || || || || ||
marshaling, etc.), and making sure to have a starting point. || || || || || || || || ||
|| || ||
What is important in understanding a client?
|| || || || || ||
Understand the client's background, where they are coming from. || || || || || || || ||
|| || ||
Under general principles of California's code of ethics, part (b)--
|| || || || || || || || ||
The fiduciary shall obey all local, state, and federal laws, regulations, and requirements by the
|| || || || || || || || || || || || || || ||
courts.
|| || ||
Under general principles of California's code of ethics, part (a)--
|| || || || || || || || ||
The fiduciary shall maintain relations (as appropriate) with a conservatee, ward, principal, and
|| || || || || || || || || || || || ||
beneficiary as appropriate to appointment. || || || ||
|| || ||
As general rule, regarding decision making capacity of the client--
|| || || || || || || || ||
The fiduciary shall allow reasonable opportunity for the client to exercise his or her own choices
|| || || || || || || || || || || || || || || ||
as they are capable of.
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