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Exam 43: Insurance, Wills, and Trusts

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Question 21

Multiple Choice

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Rollo opens an account for $250,000 at Savers Bank. The account provides that the funds are held in trust for Thea, Rollo's daughter. This is

A) a constructive trust.
B) a living trust.
C) a resulting trust.
D) a testamentary trust.

E) B) and D)
F) B) and C)

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Question 22

Multiple Choice

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Under intestacy laws, if Darlene has no heirs, then the property of her estate

A) passes to a person designated by a probate court.
B) is transferred to the state.
C) devolves to a preselected charity.
D) is held in trust for future beneficiaries.

E) A) and D)
F) A) and C)

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Question 23

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At the grantor's death, assets held in a living trust revert to the decedent's estate.

Insurance is an arrangement for transferring and allocating risk.

Clark obtains from Dependable Insurance Inc. a policy that provides if a dispute arises between the parties concerning the settlement of a claim, the dispute must be submitted to an impartial third party, not a court, for resolution. This is

Under intestacy laws, if no heirs exist, then the state assumes ownership of the property of an estate.

By insuring property, its owners protect themselves.

An insurance broker is most likely

Roma obtains a fire insurance policy on her house with Safe-wise Insurance Company. This policy is an arrangement for

With a constructive trust, a court declares a property owner to be a trustee for parties who are, in fairness, entitled to the benefits that flow from the property.

An insurable interest in property need not exist when a policy insuring against its damage or loss is purchased.

Carl dies without a will, survived by his granddaughter Dora and her brother Elton. The grandchildren are Carl's

On the death of the owner, property can be transferred through a will, a trust, or a state law prescribing its distribution. This indicates our laws require that, on death, title to property must be

Red obtains a fire insurance policy on his vacation cabin near Smoky Mountain from Torchlight Insurance Company. The cabin is lost in a fire, but the parties dispute the amount of Torchlight's liability under an ambiguous clause in the policy. A court would most likely

If a trustee fails to comply with the terms of the trust or the governing statute, he or she is personally liable for any loss.

Insurance contracts are usually obtained through an agent, who works as an independent contractor.

If a will does not provide how an estate will be distributed to grandchildren, under the per capita method of distribution, an heir takes the share that his or her deceased parent would have been entitled to inherit.

Greta applies for a homeowners' policy with Home Insurance Company through Ivy, an insurance agent. As a general rule, Home is bound by

A testator can revoke a will by having someone else tear it up in the testator's presence and at his or her direction.

The trustee's duty of loyalty requires that he or she act in the exclusive interest of the grantor or settlor.