Estate_11th_Ch_8_MC_Solutions.pdf - ESTATE PLANNING 11TH ED...

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ESTATE PLANNING, 11TH ED. C HAPTER 8 E ND OF C HAPTER M ULTIPLE C HOICE S OLUTIONS 1. The correct answer is d. The parties to a trust are the grantor, who creates the trust and contributes the property; the trustee, who man- ages the trust and holds the legal title to the trust assets; and the beneficiary, who holds the beneficial title to the property. The principal of the trust is the property contributed to the trust; it is not a party to the trust. 2. The correct answer is a. A trust fiduciary must follow the Prudent Man Rule demonstrating a duty of loyalty and duty of care on behalf of the trust’s beneficiaries. The Prudent Man Rule specifically states that the trustee, as fiduciary, must act in the same manner that a prudent person would act if the prudent person was acting for his own benefit after considering all of the facts and circumstances surrounding the decision. None of the other options are

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