CANNON TRUST EXAM/CANNON TRUST
SCHOOL I ACTUAL EXAM 2026-2027 COMPLETE
REAL EXAM QUESTIONS AND CORRECT
VERIFIED ANSWERS WITH DETAILED
RATIONALES (100% RELIABLE ANSWERS)
CANNON TRUST SCHOOL I EXAM EDITION 2026
RECENTLY UPDATED EXAM |ALREADY
GRADED A+ |INSTANT DOWNLOAD PDF
1. A trust in which the trustee has discretion over the timing and amount of both
income and principal distributions is best described as:
A. A simple trust
B. A grantor trust
C. A discretionary/complex trust
D. A unitrust
A simple trust must distribute all income annually and cannot make principal
distributions or charitable gifts; because this trust gives the trustee discretion over
,both income and principal, it falls outside the simple trust definition and is instead
a discretionary (complex) trust.
2. Which document generally governs a trustee's powers and duties first, before
state statute is consulted?
A. The Internal Revenue Code
B. The trust instrument
C. The Uniform Probate Code
D. Common law of the state
Trust administration follows a hierarchy: the settlor's expressed intent in the
governing instrument controls first; state statutes and common law fill gaps only
where the document is silent or ambiguous.
3. The legal duty requiring a trustee to act solely in the interest of the beneficiaries,
without regard to the trustee's own interests, is the duty of:
A. Prudence
B. Loyalty
C. Impartiality
D. Disclosure
The duty of loyalty is the cornerstone fiduciary obligation prohibiting self-dealing
and conflicts of interest; it requires the trustee to place beneficiary interests ahead
of its own at all times.
,4. A trustee who must balance the interests of an income beneficiary against those
of a remainder beneficiary is exercising the duty of
A. Loyalty
B. Impartiality
C. Segregation
D. Prudent investment
The duty of impartiality obligates a trustee to treat multiple beneficiaries fairly
relative to their respective interests, particularly where income and remainder
interests compete for the same resources.
5. Under the Prudent Investor Act, investment performance is generally evaluated:
A. On an asset-by-asset basis
B. In the context of the entire portfolio
C. Only against a single benchmark index
D. Based solely on income yield
Modern portfolio theory, as codified in the Prudent Investor Act, requires trustees
to evaluate risk and return in terms of the total portfolio's risk/return objectives
rather than the performance of any single holding.
, 6. Which of the following is an example of a tangible personal property asset in an
estate?
A. A brokerage account
B. A jewelry collection
C. A promissory note
D. Stock certificates
Tangible personal property is physical property that can be touched and
moved, such as jewelry, furniture, or vehicles; securities and notes are
intangible personal property represented by paper or electronic evidence of
ownership.
7. Assets that pass outside of probate include all of the following EXCEPT:
A. Property held in joint tenancy with right of survivorship
B. Life insurance proceeds payable to a named beneficiary
C. Assets titled in a revocable living trust
D. Assets titled solely in the decedent's individual name with no beneficiary
designation
Only assets with survivorship features, beneficiary designations, or trust titling
avoid probate; property titled solely in the decedent's name without such features
must pass through the probate estate.
8. A grantor retains the right to revoke a trust during their lifetime. For income tax
purposes, this trust is classified as:
SCHOOL I ACTUAL EXAM 2026-2027 COMPLETE
REAL EXAM QUESTIONS AND CORRECT
VERIFIED ANSWERS WITH DETAILED
RATIONALES (100% RELIABLE ANSWERS)
CANNON TRUST SCHOOL I EXAM EDITION 2026
RECENTLY UPDATED EXAM |ALREADY
GRADED A+ |INSTANT DOWNLOAD PDF
1. A trust in which the trustee has discretion over the timing and amount of both
income and principal distributions is best described as:
A. A simple trust
B. A grantor trust
C. A discretionary/complex trust
D. A unitrust
A simple trust must distribute all income annually and cannot make principal
distributions or charitable gifts; because this trust gives the trustee discretion over
,both income and principal, it falls outside the simple trust definition and is instead
a discretionary (complex) trust.
2. Which document generally governs a trustee's powers and duties first, before
state statute is consulted?
A. The Internal Revenue Code
B. The trust instrument
C. The Uniform Probate Code
D. Common law of the state
Trust administration follows a hierarchy: the settlor's expressed intent in the
governing instrument controls first; state statutes and common law fill gaps only
where the document is silent or ambiguous.
3. The legal duty requiring a trustee to act solely in the interest of the beneficiaries,
without regard to the trustee's own interests, is the duty of:
A. Prudence
B. Loyalty
C. Impartiality
D. Disclosure
The duty of loyalty is the cornerstone fiduciary obligation prohibiting self-dealing
and conflicts of interest; it requires the trustee to place beneficiary interests ahead
of its own at all times.
,4. A trustee who must balance the interests of an income beneficiary against those
of a remainder beneficiary is exercising the duty of
A. Loyalty
B. Impartiality
C. Segregation
D. Prudent investment
The duty of impartiality obligates a trustee to treat multiple beneficiaries fairly
relative to their respective interests, particularly where income and remainder
interests compete for the same resources.
5. Under the Prudent Investor Act, investment performance is generally evaluated:
A. On an asset-by-asset basis
B. In the context of the entire portfolio
C. Only against a single benchmark index
D. Based solely on income yield
Modern portfolio theory, as codified in the Prudent Investor Act, requires trustees
to evaluate risk and return in terms of the total portfolio's risk/return objectives
rather than the performance of any single holding.
, 6. Which of the following is an example of a tangible personal property asset in an
estate?
A. A brokerage account
B. A jewelry collection
C. A promissory note
D. Stock certificates
Tangible personal property is physical property that can be touched and
moved, such as jewelry, furniture, or vehicles; securities and notes are
intangible personal property represented by paper or electronic evidence of
ownership.
7. Assets that pass outside of probate include all of the following EXCEPT:
A. Property held in joint tenancy with right of survivorship
B. Life insurance proceeds payable to a named beneficiary
C. Assets titled in a revocable living trust
D. Assets titled solely in the decedent's individual name with no beneficiary
designation
Only assets with survivorship features, beneficiary designations, or trust titling
avoid probate; property titled solely in the decedent's name without such features
must pass through the probate estate.
8. A grantor retains the right to revoke a trust during their lifetime. For income tax
purposes, this trust is classified as:
