Cannon Trust School I Exam Latest Update
2026|2027| A Comprehensive Review Of 250
Practice Questions with Answers Rationales|
Pass Guaranteed
Introduction
The Cannon Trust School I Exam is the foundational certification examination
for trust and estate professionals, designed to validate competency in trust
administration, fiduciary law, taxation, and investment principles. This practice test
contains 250 original, non-duplicative multiple-choice questions formatted to
mirror the actual exam's style and difficulty. Each question presents a practical
scenario relevant to trust administration practice, followed by four answer choices
(A–D) and a detailed rationale explaining the correct answer. The exam format
consists of 100 multiple-choice questions to be completed in 120 minutes with an
80% passing score. This expanded question bank is intended for comprehensive
preparation and self-assessment across all core topic areas.
Questions 1–50
1. A 62-year-old grantor establishes a revocable living trust and names his
eldest daughter as successor trustee. The grantor becomes incapacitated 18
months later. Which statement accurately describes the daughter's powers?
A. She may manage and distribute trust assets according to the trust terms without
court supervision
B. She must petition the probate court for a conservatorship before acting
C. She can only pay medical bills; all other distributions require beneficiary
consent
D. She must liquidate all trust assets and hold proceeds in a court-monitored
account
,Correct Answer: A
Rationale: A successor trustee of a revocable living trust steps into the grantor's
role upon incapacity and administers the trust per its terms without court
involvement. A conservatorship is unnecessary because the trust already provides
authority. The trustee's powers are not limited to medical expenses, nor is
liquidation required.
2. A corporate trustee receives a demand from a remainder beneficiary to
furnish a full accounting of trust activities for the past three years. The trustee
has been sending annual summaries to the income beneficiaries only. Under
the Uniform Trust Code, which response is correct?
A. The trustee may deny the request because remainder beneficiaries have no right
to accountings
B. The trustee must provide the remainder beneficiary a complete accounting upon
reasonable request
C. The trustee need only provide accountings to income beneficiaries named in the
trust instrument
D. The trustee must obtain court approval before disclosing information to a
remainder beneficiary
Correct Answer: B
Rationale: Under UTC Section 813, a qualified beneficiary is entitled to a full
accounting upon reasonable request. Remainder beneficiaries are qualified
beneficiaries, so the corporate trustee must comply. Denying the request or limiting
disclosures to income beneficiaries alone violates the code.
3. A trust instrument directs the trustee to distribute income quarterly but is
silent on how to handle capital gains. During the fiscal year the trust realizes
$45,000 in capital gains. Under the Uniform Principal and Income Act, capital
gains are allocated to:
A. Income because they increase the trust's liquid assets
B. Both income and principal equally to balance distributions
,C. Principal unless the trust instrument directs otherwise
D. The beneficiary with the greatest financial need at the trustee's discretion
Correct Answer: C
Rationale: The Uniform Principal and Income Act allocate capital gains to
principal by default. Trust instruments can override this, but when silent, the
default applies. Allocating gains to income would unfairly benefit current income
beneficiaries over remainder beneficiaries.
4. A fiduciary who engages in self-dealing has violated which duty?
A. Duty of care
B. Duty of loyalty
C. Duty to account
D. Duty of impartiality
Correct Answer: B
Rationale: Self-dealing—entering into transactions where the fiduciary has a
personal interest—is a violation of the duty of loyalty. The fiduciary must act
solely in the beneficiaries' interests and avoid conflicts of interest.
5. The "prudent investor rule" requires a trustee to:
A. Invest only in government bonds
B. Avoid all investment risk
C. Make investment decisions with care, skill, and caution
D. Maximize income at all costs
Correct Answer: C
Rationale: The prudent investor rule requires trustees to make investment
decisions with the care, skill, and caution that a prudent person would exercise,
considering the purposes, terms, and other circumstances of the trust.
, 6. Under the Uniform Prudent Investor Act, trustees should consider:
A. Only income generation
B. Only capital preservation
C. The role that each investment plays within the overall portfolio
D. Only the needs of current beneficiaries
Correct Answer: C
Rationale: The Uniform Prudent Investor Act requires trustees to consider the role
each investment plays within the overall portfolio, adopting a total return approach
rather than evaluating investments in isolation.
7. The duty to "inform and report" requires a trustee to:
A. Provide beneficiaries with complete and accurate information about the trust
B. Keep all trust information confidential from beneficiaries
C. Report only to the grantor
D. Provide information only when requested
Correct Answer: A
Rationale: The duty to inform and report requires trustees to provide beneficiaries
with complete and accurate information about the trust, including accountings and
material facts affecting their interests.
8. A trustee who fails to diversify investments may violate which duty?
A. Duty of loyalty
B. Duty of impartiality
C. Duty of prudence
D. Duty to follow the trust instrument
Correct Answer: C
Rationale: The duty of prudence requires trustees to diversify investments to
minimize risk, unless the trust instrument provides otherwise. Failure to diversify
can be a breach of fiduciary duty.
2026|2027| A Comprehensive Review Of 250
Practice Questions with Answers Rationales|
Pass Guaranteed
Introduction
The Cannon Trust School I Exam is the foundational certification examination
for trust and estate professionals, designed to validate competency in trust
administration, fiduciary law, taxation, and investment principles. This practice test
contains 250 original, non-duplicative multiple-choice questions formatted to
mirror the actual exam's style and difficulty. Each question presents a practical
scenario relevant to trust administration practice, followed by four answer choices
(A–D) and a detailed rationale explaining the correct answer. The exam format
consists of 100 multiple-choice questions to be completed in 120 minutes with an
80% passing score. This expanded question bank is intended for comprehensive
preparation and self-assessment across all core topic areas.
Questions 1–50
1. A 62-year-old grantor establishes a revocable living trust and names his
eldest daughter as successor trustee. The grantor becomes incapacitated 18
months later. Which statement accurately describes the daughter's powers?
A. She may manage and distribute trust assets according to the trust terms without
court supervision
B. She must petition the probate court for a conservatorship before acting
C. She can only pay medical bills; all other distributions require beneficiary
consent
D. She must liquidate all trust assets and hold proceeds in a court-monitored
account
,Correct Answer: A
Rationale: A successor trustee of a revocable living trust steps into the grantor's
role upon incapacity and administers the trust per its terms without court
involvement. A conservatorship is unnecessary because the trust already provides
authority. The trustee's powers are not limited to medical expenses, nor is
liquidation required.
2. A corporate trustee receives a demand from a remainder beneficiary to
furnish a full accounting of trust activities for the past three years. The trustee
has been sending annual summaries to the income beneficiaries only. Under
the Uniform Trust Code, which response is correct?
A. The trustee may deny the request because remainder beneficiaries have no right
to accountings
B. The trustee must provide the remainder beneficiary a complete accounting upon
reasonable request
C. The trustee need only provide accountings to income beneficiaries named in the
trust instrument
D. The trustee must obtain court approval before disclosing information to a
remainder beneficiary
Correct Answer: B
Rationale: Under UTC Section 813, a qualified beneficiary is entitled to a full
accounting upon reasonable request. Remainder beneficiaries are qualified
beneficiaries, so the corporate trustee must comply. Denying the request or limiting
disclosures to income beneficiaries alone violates the code.
3. A trust instrument directs the trustee to distribute income quarterly but is
silent on how to handle capital gains. During the fiscal year the trust realizes
$45,000 in capital gains. Under the Uniform Principal and Income Act, capital
gains are allocated to:
A. Income because they increase the trust's liquid assets
B. Both income and principal equally to balance distributions
,C. Principal unless the trust instrument directs otherwise
D. The beneficiary with the greatest financial need at the trustee's discretion
Correct Answer: C
Rationale: The Uniform Principal and Income Act allocate capital gains to
principal by default. Trust instruments can override this, but when silent, the
default applies. Allocating gains to income would unfairly benefit current income
beneficiaries over remainder beneficiaries.
4. A fiduciary who engages in self-dealing has violated which duty?
A. Duty of care
B. Duty of loyalty
C. Duty to account
D. Duty of impartiality
Correct Answer: B
Rationale: Self-dealing—entering into transactions where the fiduciary has a
personal interest—is a violation of the duty of loyalty. The fiduciary must act
solely in the beneficiaries' interests and avoid conflicts of interest.
5. The "prudent investor rule" requires a trustee to:
A. Invest only in government bonds
B. Avoid all investment risk
C. Make investment decisions with care, skill, and caution
D. Maximize income at all costs
Correct Answer: C
Rationale: The prudent investor rule requires trustees to make investment
decisions with the care, skill, and caution that a prudent person would exercise,
considering the purposes, terms, and other circumstances of the trust.
, 6. Under the Uniform Prudent Investor Act, trustees should consider:
A. Only income generation
B. Only capital preservation
C. The role that each investment plays within the overall portfolio
D. Only the needs of current beneficiaries
Correct Answer: C
Rationale: The Uniform Prudent Investor Act requires trustees to consider the role
each investment plays within the overall portfolio, adopting a total return approach
rather than evaluating investments in isolation.
7. The duty to "inform and report" requires a trustee to:
A. Provide beneficiaries with complete and accurate information about the trust
B. Keep all trust information confidential from beneficiaries
C. Report only to the grantor
D. Provide information only when requested
Correct Answer: A
Rationale: The duty to inform and report requires trustees to provide beneficiaries
with complete and accurate information about the trust, including accountings and
material facts affecting their interests.
8. A trustee who fails to diversify investments may violate which duty?
A. Duty of loyalty
B. Duty of impartiality
C. Duty of prudence
D. Duty to follow the trust instrument
Correct Answer: C
Rationale: The duty of prudence requires trustees to diversify investments to
minimize risk, unless the trust instrument provides otherwise. Failure to diversify
can be a breach of fiduciary duty.
