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Cannon Trust School II Questions and
Correct Answers
Which of the following is NOT a requirement of a QTIP trust?
A. All net accounting income to be paid to the surviving spouse at
least annually.
B. Principal to be distributed at the trustee's discretion for the
surviving spouse's health, education, support, or maintenance.
C. The surviving spouse has the ability to require the trustee to
convert non-income producing assets to income productive assets.
D. The surviving spouse may be the only permissible distributee
during their lifetime. Ans: B. Principal to be distributed at the
trustee's discretion for the surviving spouse's health, education,
support, or maintenance.
In a pro rata fractional formula, which trust is frozen during
administration prior to funding?
A. The marital trust
B. The residual trust
C. Neither, they must share the appreciation/depreciation.
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D. Both the marital and residual trusts. Ans: C. Neither, they must
share the appreciation/depreciation.
Which of the following is MANDATORY to qualify the general
power of appointment (GPA) marital deduction trust?
A. Right to encroach upon corpus of the marital deduction share
by surviving spouse during lifetime.
B. Ultimate distribution to decedent's heirs.
C. All net accounting income paid at least annually to the surviving
spouse and surviving spouse is given either lifetime GPA or
testamentary GPA.
D. Surviving spouse has the right to make gifts from the marital
deduction share during lifetime. Ans: C. All net accounting income
paid at least annually to the surviving spouse and surviving
spouse is given either lifetime GPA or testamentary GPA.
Which of the following is NOT a characteristic of a qualified
domestic trust (QDT)?
A. At least one trustee must be a U.S. citizen or domestic
corporation.
B. The executor of the donor's estate must irrevocably elect to
have the trust treated at a QDT.
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C. The U.S. trustee must have the right to withhold federal estate
taxes from any principal distribution.
D. Upon termination of the trust, the U.S. trustee must file a final
accounting with the IRS and a tax at the maximum estate tax rate
of the current fair market value of the trust assets shall be
assessed. Ans: D. Upon termination of the trust, the U.S. trustee
must file a final accounting with the IRS and a tax at the maximum
estate tax rate of the current fair market value of the trust assets
shall be assessed.
H's will creates a QTIP marital trust for the benefit of W. The trust
provides that W will receive all of the trust income, and will receive
trust principal for her health and support. W has a limited power
of appointment over the trust. Bank X is designated to serve as the
sole trustee. At W's death, any income or principal she received
from the trust will be included in her gross estate. H's executor
will make a QTIP election for this trust on H's federal estate tax
return. The marital trust:
A. will be included in W's gross estate at her death because W had
a limited power of appointment over the trust.
B. will be included in W's gross estate at her death because she was
entitled to receive distributions from trust principal for her health
and support.
C. will not be included in W's gross estate at her death because a
QTIP election was made.
D. will be included in W's estate because a QTIP election was made.
Ans: D. will be included in W's estate because a QTIP election was
made.
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The duration of a life estate is BEST described as which of the
following?
A. A fixed term
B. A life or the lives of one or more persons
C. Potentially infinite
D. Not to exceed 99 years Ans: B. A life or the lives of one or more
persons
Husband is not a U.S. citizen but is a resident alien. Wife is a
naturalized citizen. Husband dies leaving everything to his wife
outright. How much of a marital deduction will his estate have?
A. 100%
B. 0% because the property must be in qualified domestic trust.
C. 0% because non-U.S. not entitled to marital deductions.
D. 0% because the property must be in a qualified terminable
interest property (QTIP) trust. Ans: A. 100%
H has a $17,000,000 estate. He has children by his first wife. His
second wife has two children by a previous marriage. H wants to
provide exclusively for W2 during her life, pay no federal estate
taxes at his death, minimize federal estate taxes at W2's death, and
ensure that when W2 dies, his estate will go to his children, not
© 2025 All rights reserved
Cannon Trust School II Questions and
Correct Answers
Which of the following is NOT a requirement of a QTIP trust?
A. All net accounting income to be paid to the surviving spouse at
least annually.
B. Principal to be distributed at the trustee's discretion for the
surviving spouse's health, education, support, or maintenance.
C. The surviving spouse has the ability to require the trustee to
convert non-income producing assets to income productive assets.
D. The surviving spouse may be the only permissible distributee
during their lifetime. Ans: B. Principal to be distributed at the
trustee's discretion for the surviving spouse's health, education,
support, or maintenance.
In a pro rata fractional formula, which trust is frozen during
administration prior to funding?
A. The marital trust
B. The residual trust
C. Neither, they must share the appreciation/depreciation.
© 2025 All rights reserved
, 2 | Page
D. Both the marital and residual trusts. Ans: C. Neither, they must
share the appreciation/depreciation.
Which of the following is MANDATORY to qualify the general
power of appointment (GPA) marital deduction trust?
A. Right to encroach upon corpus of the marital deduction share
by surviving spouse during lifetime.
B. Ultimate distribution to decedent's heirs.
C. All net accounting income paid at least annually to the surviving
spouse and surviving spouse is given either lifetime GPA or
testamentary GPA.
D. Surviving spouse has the right to make gifts from the marital
deduction share during lifetime. Ans: C. All net accounting income
paid at least annually to the surviving spouse and surviving
spouse is given either lifetime GPA or testamentary GPA.
Which of the following is NOT a characteristic of a qualified
domestic trust (QDT)?
A. At least one trustee must be a U.S. citizen or domestic
corporation.
B. The executor of the donor's estate must irrevocably elect to
have the trust treated at a QDT.
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C. The U.S. trustee must have the right to withhold federal estate
taxes from any principal distribution.
D. Upon termination of the trust, the U.S. trustee must file a final
accounting with the IRS and a tax at the maximum estate tax rate
of the current fair market value of the trust assets shall be
assessed. Ans: D. Upon termination of the trust, the U.S. trustee
must file a final accounting with the IRS and a tax at the maximum
estate tax rate of the current fair market value of the trust assets
shall be assessed.
H's will creates a QTIP marital trust for the benefit of W. The trust
provides that W will receive all of the trust income, and will receive
trust principal for her health and support. W has a limited power
of appointment over the trust. Bank X is designated to serve as the
sole trustee. At W's death, any income or principal she received
from the trust will be included in her gross estate. H's executor
will make a QTIP election for this trust on H's federal estate tax
return. The marital trust:
A. will be included in W's gross estate at her death because W had
a limited power of appointment over the trust.
B. will be included in W's gross estate at her death because she was
entitled to receive distributions from trust principal for her health
and support.
C. will not be included in W's gross estate at her death because a
QTIP election was made.
D. will be included in W's estate because a QTIP election was made.
Ans: D. will be included in W's estate because a QTIP election was
made.
© 2025 All rights reserved
, 4 | Page
The duration of a life estate is BEST described as which of the
following?
A. A fixed term
B. A life or the lives of one or more persons
C. Potentially infinite
D. Not to exceed 99 years Ans: B. A life or the lives of one or more
persons
Husband is not a U.S. citizen but is a resident alien. Wife is a
naturalized citizen. Husband dies leaving everything to his wife
outright. How much of a marital deduction will his estate have?
A. 100%
B. 0% because the property must be in qualified domestic trust.
C. 0% because non-U.S. not entitled to marital deductions.
D. 0% because the property must be in a qualified terminable
interest property (QTIP) trust. Ans: A. 100%
H has a $17,000,000 estate. He has children by his first wife. His
second wife has two children by a previous marriage. H wants to
provide exclusively for W2 during her life, pay no federal estate
taxes at his death, minimize federal estate taxes at W2's death, and
ensure that when W2 dies, his estate will go to his children, not
© 2025 All rights reserved
