Answer Choice 1	Answer Choice 2	Answer Choice 3	Answer Choice 4	Selected Answer
Question 1:  Ross gives Monica $10,000 and specifically tells her that the money is 'to be held for Joey.' Which of the following is correct?
A trust is created and Monica is the Settlor	A trust is created and Monica is the trustee	Since no language of trust was used, no trust is created, so Monica can keep the money	A trust is created and Monica is the beneficiary
Question 2:  Which of these is NOT a valid 'public' purpose to qualify as a chartiable trust?
A trust that applies money toward the buidling of gyms so that children should have better access to physical education	A trust that pays money toward the educating of people on why U.S. foreign policy should be changed in a particular manner	A trust that applies money for the education of people on how to import illegal handguns	None of these are valid charitable trust purposes
Question 3:  An 'in terrorem' clause in a will...
Chooses which people become executors and trustees for the estate	Describes the manner in which a testator's real property should be distributed	Discourages people from contesting the will	Chooses which state should have jurisidction to probate the estate
Question 4:  The difference between a charitable remainder trust and a charitable lead trust lies in...
Whether the trust is a 'mixed purpose' trust	The type of charitable cause that is the beenficiary of the trust	Whether or not there are charitable beneficiaries	When the interest of the charitable cause applies
Question 5:  Alexis, a 71 year old retired woman, comes to your office and tells you that she wants to divide her assets among her children at the time of her death. She says that she does not want her children to have to go through a probate proceeding. She also is worried that she may need the money herself one day when she gets older. She also wants to minimize her estate's federal estate tax bill. She tells you that she has approximately $400,000 worth of assets in her estate. What step would you recommend for Alexis?
She should just use a simple will, because more complicated estate planning steps are unnecessary	She should create a revocable lifetime trust and put her assets into that trust, either now or in her will	She should take out a big life insurance policy and create an irrevocable life insurance trust (ILIT) and transfer the policy into that trust.	She should create an irreovable lifetime trust and put $11,000 per year into the trust for each child.
Question 6:  Which steps must be taken before money is actually distributed from the estate of a decedent to the beneficiaries?
Administration expenses and any applicable taxes must be paid	Debts of the decedent must be paid	The probate court must appoint a fiduciary to handle the estate	All of these must be done
Question 7:  Attorney Ally drafted Mike's will. In the will, Mike left all of his money to Ally. At the probate hearing, Mike's children challenge the will in the basis of undue influence. Evidence shows that Mike originally wanted to leave his money to his children, but, after many long meetings with Ally, he changed his mind. However, the children cannot prove with direct evidence what went on in those meetings. Will the will contest be successful?
Probably yes, because of the influence that Ally held over Mike based on their attorney-client relationship	No; because a person has a right to do whatever he or she wants in his or her will	Probably not; because the children cannot show undue influence with direct evidence	Yes; because a gift to a an attorney who drafts the will is always per se invalid
Question 8:  Mary died with an estate consisting of $100,000. She was unmarried and left behind two children, Marc and Tina. In her will, she left all of her assets to Marc. When Mary died, she owed $80,000 to Capital One Bank (for a credit card bill). The costs of administering her estate, including attorney's fees and other administrative expenses, came to $20,000. Who will receive money from Mary's estate?
Just the administration expenses and Capital One Bank	Just the administration expenses and Marc	The administration expenses, Capital One Bank, Marc and Tina	The administration expenses, Capital One Bank, and Marc
Question 9:  Credit shelter trusts, QTIP trusts and QDOT trusts that are created by provisions in wills are all examples of...
constructive trusts	testamentary trusts	inter-vivos trusts	irrevocable living trusts
Question 10:  Brett's will calls for his friend Melissa to be the executor of his estate. After Brett's death, his wife, Andrea petitions the probate court, asking that she, as Brett's wife, and not Melissa, be appointed as executor. What should the probate court do?
The probate court should assume the role of adminstering Brett's estate	Appoint whomever the court considers to be more competent to be the executor	Appoint Andrea, because the spouse is presumed to be the most competent executor	Appoint Melissa as executor, as long as she is competent to fulfill the role of executor
Question 11:  John is trustee for a trust that owns a house that is presently unoccupied. John feels that it would be a major waste for the house to just sit there and accumulate property tax bills and be unproductive. What may John do?
He can't do anything; he should just let the house sit there until the trust calls for its distribution	He may rent the house out, but he may not sell it	He may not lease the house out because the tenants might ruin it, but he may sell it	He probably has the discretion to rent out and/or sell the house if need be
Question 12:  Missouri has a 'nonclaim statute' that calls for creditor claims to be made within 6 months of death of the debtor. Barry owns a home on which First National Bank holds a mortgage of $500,000 for a loan that Barry took out when he bought the house. When Barry dies, First National waits a full year before filing a claim. What is the status of that mortgage?
It is extinguished because the 'nonclaim statute' time period ran out	The mortgage survives, because it is a secured interest	It is extinguished if and only if First National cannot show a good excuse for waiting so long to file the claim	The mortgage survives, because 'nonclaim' statutes are unconstitutional as they infringe on the rights of the lenders to enforce their loans in court.
Question 13:  Which of the following is generaly within the responsibility of a trustee administering a trust?
All of these	The duty to make the trust assets productive without taking unnecessary risk with the trust assets.	The duty to avoid comingling the trust funds with the trustee's own money	The duty to avoid making deals between the trust and the trustee in his personal capacity
Question 14:  Which of the following is true about revocable lifetime trusts?
There must be at least some property put into the trust at the time of creation	Any money put into the trust will be exempt from estate tax	All of the other choices are true	They can be modified only if the grantor has 'good cause' to modify their terms
Question 15:  Jerry conveys his apartment in Manhattan 'to Kramer, in trust for Elaine.' Which of the following is correct?
Kramer holds legal title to the apartment and Elaine holds equitable title to the apartment	Elaine holds legal and equitable title to the apartment	Elaine holds legal title to the apartment and Kramer holds equitable title to the apartment	Kramer holds legal and equitable title to the apartment
Question 16:  Which of the following would qualify as a 'public' (charitable) trust?
A trust to benefit whomever the grantor later chooses to give the money to	A trust to benefit a poor person who happens to be a friend of mine	A trust to benefit 'the citizens of the Earth'	A trust with funds to be paid by the trustee to institutions that research possible cancer cures.
Question 17:  During his life, Paul gave $100,000 to his investment consultant, Charles. After Paul's death, his heirs claim that they have proof that Paul only meant for Charles to hold that money in trust for them. should the probate court listen to such evidence?
Yes, because this is a 'semi-secret' trust	No, because extrinsic evidence is not allowed to change the plain meaning of a gift	Yes, because courts usually allow extrinsic evidence of the existence of a 'secret' trust	No, because extrinsic evidence is never allowed in a probate proceeding
Question 18:  Which of the following can be accomplished by the creation and maintenance of an irrevocable lifetime trust?
Avoiding probate	Setting up a comprehensive estate plan outside of the will	All of these	Saving on estate tax
Essay Question:   Essay Question (worth a max of 20 points- 10 of which are "extra credit"): Lisa is 60 years old and has an estate of about $10 million. She is married to Sam and she has 3 children and 7 grandchildren. Lisa is in good health, but she wants to start planning for her estate now. She wants to give most of her money to her husband and children, but she also is very active in the community and she wants to give some money to chartiable causes. She wants to reduce her estate tax liability as much as possible. What steps would you recommend that Lisa should take, in terms of both the contents of her will and any other estate planning steps that should be taken apart from her will?