WorksheetsTRUST UNIT IV
Total questions: 46
Worksheet time: 33mins
Rules and Functions of Trusteeship / Fiduciary Activities
Personal Trust
Institutional Trust
Court Trust
Escrow Agreement
Custodianship
Rules and Functions of Agency
Investment Management Agreement
Escrow Agreement
Safekeeping
Custodianship
Transfer Agency
The TRUSTOR transfers/delivers assets to the TRUSTEE who will manage it for the benefit of the designated BENEFICIARIES of the Fund
(a)
A living trust created by an agreement whereby the Trustor conveys property or a sum of money to be managed by the Trustee for the preservation of the assets for future use of the Beneficiary and/or to answer for their current needs
(a)
Trustor may or may not nominate a third-party beneficiary
TRUE
FALSE
When the Trustor passes away, the property is no longer part of his estate if the trust is revocable
TRUE
FALSE
How much is the minimum criteria of a Personal Management Trust?
Php 100,000
100,000 USD
Php 250,000
Php 500,000
Any termination for causes that are inconsistent with the purpose/distribution clause shall render the OR ineligible from opening a new PMT within a period of three (3) year from the termination date
TRUE
FALSE
This type of trust is for people who are not sure that they will not, in the future, need the entrusted property for themselves, or not certain as to who would be their ultimate or final beneficiaries of the trust
(a)
In an Irrevocable PMT, Trustor reserves the right to change or amend the terms and conditions of the trust, or to terminate the trust at his pleasure
TRUE
FALSE
In a Revocable PMT, Trustor does not reserve the right to amend the terms of the trust. Trust cannot be revoked except for causes prescribed by law
TRUE
FALSE
Trustor COMPLETELY and ABSOLUTELY RELINQUISHES HIS OWNERSHIP to the trust property
(a)
An arrangement whereby the employer provides benefits for employees on or after termination of service
(a)
Document where the company sets (1) employees qualified for retirement benefits, (2) when will they be able to claim it, and (3) how much they will receive when they separate from the company
(a)
Will apply if there are no plan rules in place, mandates payment of retirement benefits
Republic Act No. 7641
Republic Act No. 7461
Republic Act No. 7164
Republic Act No. 7146
Mandates private companies without an established retirement plan to pay retirement benefits to their employees upon attainment of the minimum age and service requirement
(a)
In R.A. No. 7641, The retiring employee should be at least 60 years old not exceeding 70 years old and with at least 10 years of service in the establishment to avail retirement benefits
TRUE
FALSE
In a Retirement Fund, Trustor cannot be a beneficiary
TRUE
FALSE
Provides tax privileges to both the company and its retiring employees provided certain conditions are met.
R.A. No. 4917
R.A. No. 4719
R.A. No. 7416
R.A. No. 7641
In R.A. No. 4917, Retiring employees of companies with a reasonable retirement plan should be at least 50 years old and with 10 years of service with the same employer to avail of the tax exemption
TRUE
FALSE
Types of Retirement Plan
Defined Benefit
Defined Pension
Defined Contribution
Pension Contribution
Benefits to be received by the members are defined by formulas fixed in the plan rules while an actuary estimates the contributions necessary to meet the promised benefits periodically
(a)
Employer contributions are fixed in the plan rules. A separate account is maintained for each member to which all contributions and earnings on these contributions are credited. The benefits are a function of both the total contributions made and the investment performance of the fund
(a)
In a Defined Benefit, employee does not bear investment risk
TRUE
FALSE
In Retrenchment, The separation pay shall be equivalent to three (3) months pay or at least one-half (1/2) month pay for every year of service, whichever is higher
TRUE
FALSE
In Retrenchment, at least six (6) months shall be considered one (1) whole year
TRUE
FALSE
In Redundancy (Retirement Fund), Workers affected shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher.
TRUE
FALSE
Not the owner of the Trust asset, Does not have actual possession of the Trust asset and is not a beneficiary of the Trust
Creator of the Trust
Court Trust
Trustee
Administrator
The trustee has no discretion to sell, dispose, or encumber the Trust asset. Disposition and encumbrance requires court approval
TRUE
FALSE
A Trust relation in which one person acts for another whom the law regards as incapable of managing his own affairs.
(a)
In Letters of Guardianship, the incompetent is called
(a)
In Letters of Guardianship, the person who acts is called
(a)
the person named in the will who is entrusted to implement its provisions
Executor
Guardian
Administrator
Trustee
The person entrusted with the care, custody, and management of the estate of a deceased person until the estate is partitioned and distributed to the heirs, legatees and devisees, if any
Executor
Guardian
Administrator
Trustee
The guardian needs to be issued letters testamentary after the court determines his or her qualifications
TRUE
FALSE
In an Investment Management Agreement, they act as the client’s Investment Manager authorized to manage the latter’s funds according to his investment objectives, strategies, risk parameters, and other guidelines he wishes to set.
Bank
Trust department
Finance Department
All of the above
Types of Mandate
(a)
Agent has the liberty to apply judgment in terms of investments, subject to limitations agreed upon during account opening or periodic review
(a)
Agent has no discretionary powers. All functions should be stated and approved by the client (principal).
(a)
Documents, real estate, money, or securities deposited with a neutral third party (the escrow agent) to be delivered to the parties involved upon fulfillment of certain conditions, as established in a written agreement
(a)
Who is the neutral third party in an Escrow Arrangement?
(a)
In Safekeeping, the trust entity safekeep, preserve the property and perform ministerial acts with respect to the property as directed by the client Usually stocks and bonds
TRUE
FALSE
In Custodianship, the trust entity acts as an agent in keeping valuables safe and returns the asset to the owner upon the owner’s order or instruction
TRUE
FALSE
Involves essentially the duty of ascertaining, verifying, and recording the ownership of stock, commercial papers, certificates, and their transfers
Escrow Agreement
Investment Management Agreement
Trust Agreement
Transfer Agency
The stock transfer agent also takes care of issuing the original certificates of stocks, keeping in custody unissued certificates, replacement of lost or destroyed ones, stock bookkeeping, dividend disbursement, and disseminating communications to stockholders
TRUE
FALSE
Functions of transfer agents include:
Act as registrar for corporate shares/fixed income or securities
Act as subscription agent for every rights issue or IPOs
Act as paying agent for stock/cash dividends
Act as agent for stock splits, reverse split, conversion
Act as managing agent for bonds, dividends, and other securities
