#1
Which of the following is a characteristic of a trust?
Unilateral control
Multiple trustees
Competitive nature
Individual ownership
#2
What is the primary duty of a trustee in a trust relationship?
Maximize personal profits
Act in the best interests of the beneficiaries
Avoid all financial risks
Follow personal preferences
#3
Which court may have jurisdiction over trust disputes?
Criminal Court
Family Court
Probate Court
Traffic Court
#4
What is the significance of the 'settlor' in a trust agreement?
Individual establishing the trust
Primary beneficiary
Trustee's legal advisor
Court-appointed mediator
#5
What is the primary purpose of a constructive trust?
To maximize personal gain for the trustee
To remedy unjust enrichment or fraud
To avoid legal responsibilities
To distribute assets among beneficiaries
#6
What does the term 'fiduciary duty' encompass in the context of trusts?
A duty to act in the best interests of the trustee
A duty to act in the best interests of the beneficiaries
A duty to prioritize the settlor's interests
A duty to maximize personal profits
#7
What is the primary purpose of a fiduciary relationship?
To maximize personal gain
To avoid legal responsibilities
To prioritize the interests of another party
To exploit trust for personal benefit
#8
In a revocable trust, who typically holds the power to alter or terminate the trust?
Beneficiary
Trustee
Settlor
Custodian
#9
What is the key difference between a revocable and irrevocable trust?
Revocable trusts are public, while irrevocable trusts are private
Revocable trusts can be modified or terminated, while irrevocable trusts cannot
Irrevocable trusts can only have one trustee, while revocable trusts can have multiple
Irrevocable trusts are taxed at a higher rate than revocable trusts
#10
In the context of fiduciary duty, what does the term 'loyalty' refer to?
Putting personal interests first
Avoiding financial transactions
Prioritizing the interests of the beneficiaries
Refusing to make investment decisions
#11
In a discretionary trust, who has the authority to distribute assets among the beneficiaries?
Trustee
Settlor
Beneficiary
Custodian
#12
What is a 'resulting trust' in the context of trust law?
A trust created through the will of the settlor
A trust that arises by implication from the actions of the parties involved
A trust with multiple beneficiaries
A trust exclusively for charitable purposes
#13
What is the purpose of a spendthrift trust?
To encourage reckless spending by beneficiaries
To protect trust assets from creditors
To limit the trustee's spending abilities
To avoid taxation entirely
#14
What is the 'prudent person' rule often associated with in fiduciary relationships?
Investment decisions
Tax regulations
Contract enforcement
Corporate governance
#15
Which legal document outlines the terms and conditions of a trust agreement?
Affidavit
Prenuptial agreement
Trust deed
Power of attorney
#16
What is a 'spendthrift provision' in a trust agreement?
A clause that encourages reckless spending
A provision allowing beneficiaries to spend trust funds freely
A safeguard against creditors seizing trust assets
A clause limiting the trustee's spending abilities
#17
What is the purpose of a charitable remainder trust?
To provide income to the beneficiaries for a specified period, with the remainder going to a charitable organization
To exclude charitable organizations from receiving any benefits
To ensure the settlor retains complete control over the assets
To avoid taxation entirely
#18
Which legal doctrine allows a court to set aside a transaction due to a conflict of interest?
Statute of limitations
Unclean hands
Res judicata
Conflict of laws
#19
What is the role of a 'protector' in certain trust structures?
Primary beneficiary
Guardian appointed by the court
Independent third party overseeing the trustee's actions
Attorney representing the trust in legal matters
#20
In the context of trusts, what does 'cy-pres' mean?
A legal principle allowing the court to modify charitable purposes
A trust with multiple beneficiaries
A provision allowing beneficiaries to spend trust funds freely
A trustee's fiduciary duty to act with care and prudence