CTFA PRACTICE
QUESTIONS (MISSED)
AND CORRECT ANSWERS
GRADED A+ 2025-2026
Which of the following is accomplished when the court of jurisdiction approves a
fiduciary's annual accounting? - ANS-The beneficiaries are prevented from objecting
later to any conduct of the trustee which was fairly stated in the accounting
You live and work in a state that has adopted the UTC. Absent any relevant language in
the instrument, a trust created after adoption of the UTC is considered: - ANS-
Revocable and amendable
Unless specifically approved by the bank's board of directors, Regulation 9 prohibits
an employee or officer from: - ANS-Being compensated for acting as a co -trustee with
his employer bank
A client wants to be certain that his family trust will be administered by you, as the
trust advisor. Accordingly, which of the following is appropriate text for the trust
instrument? - ANS-The grantor/testator wishes the trust advisor to be the
administrator assigned to the family trust, as may be practicable
A bank is co-trustee with the widow of the grantor of an irrevocable trust. She is the
income beneficiary and has a limited testamentary power to appoint among the
grantor's descendants. In default of her exercise of this power, the residue goes
outright to the grantor's descendants per stirpes. There are three adult children and no
predeceased children. The account holds a concentration of your bank stock with a
large capital gain. The trust specifically authorizes retention of the bank sto ck and
provides exculpatory language. The co -trustee wants the trust to retain the bank stock.
To fully protect the trustees from liability, your BEST course of action is to: - ANS-
Obtain a court order to retain the stock
, If a client owns 250 shares of a stock that declares a 2-for-1 stock split, how many
shares will the client own after the split is completed? - ANS-500
A client set up a $5,000,000 trust today. The trust provides a yearly payment of 6% of
the value of the property, which is revalued each year. When the client dies, the
property that is in the trust goes to Hofstra University. Which of the following types of
trusts has the client created? - ANS-Charitable remainder unitrust
A client established a trust several years prior to his death. The trustee named in the
document has died and the trust is silent with regard to successor trustees. Which of
the following is the MOST appropriate outcome? - ANS-Beneficiary petitions the court
How are credit shelter trusts impacted by the portability of the estate tax exemption? -
ANS-They may still be the basis of good planning
A client established a private foundation 10 years ago. At a local gala, the client very
publicly makes a personal pledge of a significant gift to a nonprofit organization. The
following week, the client instructs the trustee of the foundation to make the gift to
the nonprofit to fulfill the pledge. Is the distribution permissible? - ANS-No; the
distribution would be considered a fulfillment of the debt of a disqualified person,
subject to self-dealing excise taxes
What can a successor corporate trustee be held liable for? - ANS-Any act or failure of
the predecessor individual or corporate trustee; prior to accepting an appointment as
successor, a trustee should investigate the actions of its predecessor to verify
compliance with the trust instrument and applicable provisions of local law.
For alternative minimum tax purposes, the preference amount on a gift of tangible
personal property used for a charitable organization's exempt purposes is: - ANS-0
A $10,000 bond is issued with a duration of 4 years. Six months later interest rates fall
by 50 basis points. With the change in interest rates, the bond's value will change to: -
ANS-10200
QUESTIONS (MISSED)
AND CORRECT ANSWERS
GRADED A+ 2025-2026
Which of the following is accomplished when the court of jurisdiction approves a
fiduciary's annual accounting? - ANS-The beneficiaries are prevented from objecting
later to any conduct of the trustee which was fairly stated in the accounting
You live and work in a state that has adopted the UTC. Absent any relevant language in
the instrument, a trust created after adoption of the UTC is considered: - ANS-
Revocable and amendable
Unless specifically approved by the bank's board of directors, Regulation 9 prohibits
an employee or officer from: - ANS-Being compensated for acting as a co -trustee with
his employer bank
A client wants to be certain that his family trust will be administered by you, as the
trust advisor. Accordingly, which of the following is appropriate text for the trust
instrument? - ANS-The grantor/testator wishes the trust advisor to be the
administrator assigned to the family trust, as may be practicable
A bank is co-trustee with the widow of the grantor of an irrevocable trust. She is the
income beneficiary and has a limited testamentary power to appoint among the
grantor's descendants. In default of her exercise of this power, the residue goes
outright to the grantor's descendants per stirpes. There are three adult children and no
predeceased children. The account holds a concentration of your bank stock with a
large capital gain. The trust specifically authorizes retention of the bank sto ck and
provides exculpatory language. The co -trustee wants the trust to retain the bank stock.
To fully protect the trustees from liability, your BEST course of action is to: - ANS-
Obtain a court order to retain the stock
, If a client owns 250 shares of a stock that declares a 2-for-1 stock split, how many
shares will the client own after the split is completed? - ANS-500
A client set up a $5,000,000 trust today. The trust provides a yearly payment of 6% of
the value of the property, which is revalued each year. When the client dies, the
property that is in the trust goes to Hofstra University. Which of the following types of
trusts has the client created? - ANS-Charitable remainder unitrust
A client established a trust several years prior to his death. The trustee named in the
document has died and the trust is silent with regard to successor trustees. Which of
the following is the MOST appropriate outcome? - ANS-Beneficiary petitions the court
How are credit shelter trusts impacted by the portability of the estate tax exemption? -
ANS-They may still be the basis of good planning
A client established a private foundation 10 years ago. At a local gala, the client very
publicly makes a personal pledge of a significant gift to a nonprofit organization. The
following week, the client instructs the trustee of the foundation to make the gift to
the nonprofit to fulfill the pledge. Is the distribution permissible? - ANS-No; the
distribution would be considered a fulfillment of the debt of a disqualified person,
subject to self-dealing excise taxes
What can a successor corporate trustee be held liable for? - ANS-Any act or failure of
the predecessor individual or corporate trustee; prior to accepting an appointment as
successor, a trustee should investigate the actions of its predecessor to verify
compliance with the trust instrument and applicable provisions of local law.
For alternative minimum tax purposes, the preference amount on a gift of tangible
personal property used for a charitable organization's exempt purposes is: - ANS-0
A $10,000 bond is issued with a duration of 4 years. Six months later interest rates fall
by 50 basis points. With the change in interest rates, the bond's value will change to: -
ANS-10200
