WorksheetsTRUST & TREASURY UNIT III
Total questions: 56
Worksheet time: 45mins
A special relationship of trust and confidence
(a)
A person who establishes a trust & Owner of the property, transfer the property to the trust
(a)
Responsible for managing and administering a trust, entity with whom the confidence is reposed as regards the management of a property for the benefit of another person/entity
(a)
the person for whose benefit the trust has been created
(a)
A fiduciary relationship in which the trustor, gives to the trustee, the right to hold and invest assets or property on behalf of the beneficiary
(a)
Parties involved in a trust
Trustor
Trustee
Beneficiary
Agency
The person/entity creating the trust must expressly show that he really intended a trust arrangement
Lawful Purpose
Intention to Create a Trust
Trust Property
Intention of a Trust
Anything that has economic value in which a person may own and which he may transfer legal title, by gift or by sale
Lawful Purpose
Intention to Create a Trust
Trust Property
Intention of a Trust
If the trust violates a law or is against morals, public policy or public order, the trust will be void and of no effect.
Lawful Purpose
Intention to Create a Trust
Trust Property
Law of a Trust
A trust will be void if it involves the commission of a criminal act by the trustee, or if the trust encourages the neglect of parental duties, restrains marriage, religious freedom, or the performance of public duties
True
False
Trust terms sufficiently stated in the trust instrument The Trust agreement must show the following:
a. Subject matter of the trust property
b. Purpose(s) of the trust
c. Beneficiaries and the extent of their interest
d. Powers and duties of the trustee to facilitate the orderly administration of the trust and the fulfillment of the trustor’s desires
a, b, c, & d
a & b only
a, b, & c
b, c, & d only
A stock corporation duly authorized by the Monetary Board to engage in trust business shall act as a trustee or administer any trust or hold property in trust or on deposit for the use, benefit, or behoof of others
(a)
Conceptual barrier separating the Trust Entity from the other groups of the bank proper
(a)
Trust Officer should be organizationally, functionally, administratively, and operationally separate from other departments
TRUE
FALSE
Income Sources of a Trust
Trust Fees
Management Fees
Spreads
Interest Income
Trusts are insured by PDIC
TRUE
FALSE
The one who holds the title under his name
(a)
The one who enjoys the benefits of ownership
(a)
A bank or a corporation cannot be an institutional trustee that is duly authorized by the Monetary Board of the BSP to perform trust and fiduciary business
TRUE
FALSE
What are the Benefits of Appointing an Institutional Trustee
Continuity of existence and capacity
Professional Asset Management/Specialization
Tax Benefits
Transfer of Legal Title
Government supervision
All are Duties of a Trustee except:
1. Obtaining the property
2. Use of discretion
3. Administer the Trust
4. Management of the assets
5. Caring of the assets
6. Loyalty to the beneficiaries
7. Non-delegation of duties
8. Receiving Trust
3 & 8
7 & 8
1, 8, & 5
None of the above
Duty to make the trust property produce income, must see to it that investments are within the list of permissible investments
Use of discretion
Duties of the Trustee
Loyalty to the beneficiaries
Management of the assets
Transferring, safekeeping of TCT, stock certificates, etc.
Duties of the Trustee
Obtaining the property
Use of discretion
Non-delegation of duties
Reasonable care and prudence in taking care of trust assets
Caring of the assets
Duties of the Trustee
Non-delegation of duties
Loyalty to the beneficiaries
Must be administered for the benefit of the beneficiaries, must never obtain personal advantage or for the benefit of the firm
Loyalty to the beneficiaries
Management of the assets
Non-delegation of duties
None of the above
In the exercise of whatever powers may have been given to the trustee, he is considered to have discretion as to whether to use these powers, unless he is required to take certain actions, he must exercise the power conferred
Duties of the Trustee
Use of discretion
Non-delegation of duties
Trust Discretion
Duty to do the tasks ought personally to do, not allowed to delegate discretionary acts requiring the use of skill or judgment
Duties of the Trustee
Non-delegation of duties
Duties of the Trustor
None of the above
A trust entity shall administer the funds or property under its custody with the diligence that a prudent man would exercise in the conduct of an enterprise of a like character and with similar aims
(a)
Conforms with the intention and purpose of the client as manifested in the trust agreement
(a)
Administer affairs solely for the benefit of clients
(a)
Prudent Standard of Care has 2 Qualities
The element of skill or effort
The element of initiative or effort
The element of skill or judgment
The element of initiative or judgment
includes such acts as seeking qualified professional assistance where necessary for proper and efficient administration of trust
(a)
Once the purpose is achieved/accomplished, terminate the trust
(a)
Unless irrevocable trust, for the benefit of the beneficiary
(a)
Once expired, the contract is extinguished
(a)
If impossible or illegal to accomplish, terminate the trust
(a)
If beneficiaries and trustor want to terminate the trust, consent must be voluntary not by undue influence
(a)
Legal Title and Beneficial Title are given to two different persons/entities
(a)
Legal Title and Beneficial Title with the same person
(a)
A person or entity binds himself/itself to render asset management services in representation or on behalf of another, with the consent or authority of the latter.
(a)
Trust is not flexible such that it can be modified from time to time to suit the changing situations and objectives
TRUE
FALSE
No changes may be made which would alter the irrevocable nature of the trust.
(a)
The Trustor can change the terms such as beneficiary, how the fund will be invested, and manner of disposition or distribution.
(a)
If revocable, trust is not part of the trustor’s estate
TRUE
FALSE
If irrevocable, trust is part of the trustor’s estate unless donated
TRUE
FALSE
Consists of the market value of all properties owned by a decedent at the time of death
(a)
Estate is subject to standard deductions and estate tax
TRUE
FALSE
A person dies with a will, subject to probate
(a)
A person dies without a will, subject to legal succession
(a)
An act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it.
(a)
Donation during donor’s lifetime
(a)
Donation upon donor’s death
(a)
Donation by reason of marriage, a conditional donation
(a)
An act whereby a person is permitted, with the formalities prescribed by law, to control to a certain degree the disposition of his estate, to take effect after his death.
(a)
Court process to determine due execution of a will
(a)
No person may give or receive, by way of donation, more than he may give or receive by will.
TRUE
FALSE
