CTFA PRACTICE EXAM QUESTIONS
AND ANSWERS 100% PASS.
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 stock 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
2026 STUDY MATERIAL @COPYRIGHT RESERVED 1
, 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
2026 STUDY MATERIAL @COPYRIGHT RESERVED 2
AND ANSWERS 100% PASS.
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 stock 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
2026 STUDY MATERIAL @COPYRIGHT RESERVED 1
, 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
2026 STUDY MATERIAL @COPYRIGHT RESERVED 2
