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Cannon Trust School II Exam 2026/2027 – Certified
Questions, Verified Correct Answers & Detailed
Explanations ||Verified Exam!!!|| Advanced Trust
Administration, Fiduciary Law, Trust Taxation,
Investments & Estate Planning||Newest Exam!!!
4. The generation skipping transfer tax rules apply only to
which of the following?
A. Property left in trusts that exceed the rule against
perpetuity.
B. Property passing two or more generations below the
grantor.
C. Family members of the decedent.
D. All persons 37 1/2 years younger than the grantor. -
Answer-B. Property passing two or more generations
below the grantor.
5. Which of the following BEST describes the rate at which
the generation skipping transfer tax is applied?
A. At varying, progressive rates according to the unified
transfer tax rate schedule applicable at the time.
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B. Only at the lowest estate tax rate applicable at the time.
C. Only at the highest estate tax rate applicable at the
time.
D. Based on the size and nature of the transfer. - Answer-
C. Only at the highest estate tax rate applicable at the
time.
6. Which of the following is TRUE of the GSTT
Exemption?
A. The GSTT Exemption is not indexed for inflation.
B. The GSTT Exemption is more than the Applicable
Exclusion Amount.
C. The GSTT Exemption is indexed for inflation.
D. The GSTT Exemption is less than the Applicable
Exclusion Amount. - Answer-C. The GSTT Exemption is
indexed for inflation.
7. A client is looking to establish an irrevocable trust that
provides income to his spouse for life, then income to his
children for life, with the remainder interest passing to his
grandchildren. This is an example of which of the
following?
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A. Crummey trust
B. Generation-skipping trust
C. Power of appointment marital deduction trust
D. Grantor retained annuity trust - Answer-B. Generation-
skipping trust
8. Grandparents establish a trust for the benefit of
children, children's spouses, and grandchildren. If the
trustee pays $50,000 directly to Princeton University for a
grandchild's tuition, this payment should be characterized
as a $50,000:
A. Direct Skip.
B. Taxable Distribution.
C. Unlimited Exclusion Payment.
D. Taxable Termination. - Answer-C. Unlimited Exclusion
Payment.
9. On October 22, 1986, Grandmother became comatose.
She died on January 1, this year. Her will gave each of her
five grandchildren $2,000,000 outright. She also
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established a $20,000,000 trust for the benefit of her
children, her children's spouses, and their issue. To which
transfers should her executor allocate the generation-
skipping transfer (GST) exemption?
A. To the direct skips, the $2,000,000 per grandchild gifts.
B. To the $20,000,000 trust.
C. One-half to the direct skip, one-half to the trust.
D. None, because her estate is grandfathered and not
subject to GST tax. - Answer-D. None, because her estate
is grandfathered and not subject to GST tax.
1. Bob intends to make gifts to the following. Which of the
following will qualify for the generation-skipping tax
predeceased ancestor exception?
A. The children of his living children.
B. The child of his deceased child.
C. His grandnephew (whose parents are deceased).
D. His niece, if his brother is deceased. - Answer-B. The
child of his deceased child.
Cannon Trust School II Exam 2026/2027 – Certified
Questions, Verified Correct Answers & Detailed
Explanations ||Verified Exam!!!|| Advanced Trust
Administration, Fiduciary Law, Trust Taxation,
Investments & Estate Planning||Newest Exam!!!
4. The generation skipping transfer tax rules apply only to
which of the following?
A. Property left in trusts that exceed the rule against
perpetuity.
B. Property passing two or more generations below the
grantor.
C. Family members of the decedent.
D. All persons 37 1/2 years younger than the grantor. -
Answer-B. Property passing two or more generations
below the grantor.
5. Which of the following BEST describes the rate at which
the generation skipping transfer tax is applied?
A. At varying, progressive rates according to the unified
transfer tax rate schedule applicable at the time.
,2|Page
B. Only at the lowest estate tax rate applicable at the time.
C. Only at the highest estate tax rate applicable at the
time.
D. Based on the size and nature of the transfer. - Answer-
C. Only at the highest estate tax rate applicable at the
time.
6. Which of the following is TRUE of the GSTT
Exemption?
A. The GSTT Exemption is not indexed for inflation.
B. The GSTT Exemption is more than the Applicable
Exclusion Amount.
C. The GSTT Exemption is indexed for inflation.
D. The GSTT Exemption is less than the Applicable
Exclusion Amount. - Answer-C. The GSTT Exemption is
indexed for inflation.
7. A client is looking to establish an irrevocable trust that
provides income to his spouse for life, then income to his
children for life, with the remainder interest passing to his
grandchildren. This is an example of which of the
following?
,3|Page
A. Crummey trust
B. Generation-skipping trust
C. Power of appointment marital deduction trust
D. Grantor retained annuity trust - Answer-B. Generation-
skipping trust
8. Grandparents establish a trust for the benefit of
children, children's spouses, and grandchildren. If the
trustee pays $50,000 directly to Princeton University for a
grandchild's tuition, this payment should be characterized
as a $50,000:
A. Direct Skip.
B. Taxable Distribution.
C. Unlimited Exclusion Payment.
D. Taxable Termination. - Answer-C. Unlimited Exclusion
Payment.
9. On October 22, 1986, Grandmother became comatose.
She died on January 1, this year. Her will gave each of her
five grandchildren $2,000,000 outright. She also
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established a $20,000,000 trust for the benefit of her
children, her children's spouses, and their issue. To which
transfers should her executor allocate the generation-
skipping transfer (GST) exemption?
A. To the direct skips, the $2,000,000 per grandchild gifts.
B. To the $20,000,000 trust.
C. One-half to the direct skip, one-half to the trust.
D. None, because her estate is grandfathered and not
subject to GST tax. - Answer-D. None, because her estate
is grandfathered and not subject to GST tax.
1. Bob intends to make gifts to the following. Which of the
following will qualify for the generation-skipping tax
predeceased ancestor exception?
A. The children of his living children.
B. The child of his deceased child.
C. His grandnephew (whose parents are deceased).
D. His niece, if his brother is deceased. - Answer-B. The
child of his deceased child.
