Cannon Trust School 1 Questions with
Detailed Verified Answers
Your client owns a $200,000 home in joint tenancy, a $15,000 car in his
own name, an $8,000 CD in his name alone, and a $100,000-life
insurance policy with a cash value of $10,000, payable to his wife. What
is the value of his probate estate?
- $23,000
- $33,000
- $223,000
- $333,000 ANSWER: $23,000
A simple trust earned $27,000 in dividends. It paid $4,000 in trustee
fees, one-half
from income and one-half from principal. Trust accounting income is
which of the following?
- $0
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- $23,000
- $25,000
- $27,000 ANSWER: $25,000
If the Trust Document is silent with respect to a certain cash transaction,
the Trust Administrator should first look to which of the following for
guidance?
- Court of Jurisdiction
- Principal and Income Law of the State
- Grantor
- OCC ANSWER: Principal and Income Law of the State
When determining a long-term sustainable rate of return for a unitrust
payout, which of the following best represents the range of high
confidence payout percentages?
- 1-2%
- 2-3%
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- 3-5%
- 120% of the federal midterm rate ANSWER: 3-5%
Which of the following is an example of tangible personal property?
- Gold bar
- Common stock certificate
- Patent
- Vacant land ANSWER: Gold bar
Which of the following is an example of tangible personal property?
- Family residence
- IBM stock
- Jewelry
- Rental house ANSWER: Jewelry
A to B for life, then to C. Following this transfer, which of the following is
true?
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- A has a fee simple interest.
- B has a reversionary interest.
- C has a remainder interest.
- C has a life estate. ANSWER: C has a remainder interest.
Under joint tenants with rights of survivorship, when one tenant dies
which of the following best describes the result?
- Her share passes through her will to her heirs.
- Her share passes by law to her heirs, not through her will.
- Her share passes to the surviving joint tenant regardless of what her
will says.
- The asset must be sold and the estate gets 1/2 of the proceeds.
ANSWER: Her share passes to the surviving joint tenant regardless of
what her will says.
A decedent owns $400,000 in his own name, a $200,000 home in joint
tenancy with his spouse and a $100,000 life insurance policy with the
Detailed Verified Answers
Your client owns a $200,000 home in joint tenancy, a $15,000 car in his
own name, an $8,000 CD in his name alone, and a $100,000-life
insurance policy with a cash value of $10,000, payable to his wife. What
is the value of his probate estate?
- $23,000
- $33,000
- $223,000
- $333,000 ANSWER: $23,000
A simple trust earned $27,000 in dividends. It paid $4,000 in trustee
fees, one-half
from income and one-half from principal. Trust accounting income is
which of the following?
- $0
,2 | Page
- $23,000
- $25,000
- $27,000 ANSWER: $25,000
If the Trust Document is silent with respect to a certain cash transaction,
the Trust Administrator should first look to which of the following for
guidance?
- Court of Jurisdiction
- Principal and Income Law of the State
- Grantor
- OCC ANSWER: Principal and Income Law of the State
When determining a long-term sustainable rate of return for a unitrust
payout, which of the following best represents the range of high
confidence payout percentages?
- 1-2%
- 2-3%
,3 | Page
- 3-5%
- 120% of the federal midterm rate ANSWER: 3-5%
Which of the following is an example of tangible personal property?
- Gold bar
- Common stock certificate
- Patent
- Vacant land ANSWER: Gold bar
Which of the following is an example of tangible personal property?
- Family residence
- IBM stock
- Jewelry
- Rental house ANSWER: Jewelry
A to B for life, then to C. Following this transfer, which of the following is
true?
, 4 | Page
- A has a fee simple interest.
- B has a reversionary interest.
- C has a remainder interest.
- C has a life estate. ANSWER: C has a remainder interest.
Under joint tenants with rights of survivorship, when one tenant dies
which of the following best describes the result?
- Her share passes through her will to her heirs.
- Her share passes by law to her heirs, not through her will.
- Her share passes to the surviving joint tenant regardless of what her
will says.
- The asset must be sold and the estate gets 1/2 of the proceeds.
ANSWER: Her share passes to the surviving joint tenant regardless of
what her will says.
A decedent owns $400,000 in his own name, a $200,000 home in joint
tenancy with his spouse and a $100,000 life insurance policy with the
