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AFSB 153 Chapter 6 Review Questions with verified solutions 2024/2025
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AFSB 153 Chapter 6 Review Questions with verified solutions 2024/2025
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AFSB 153 Chapter 6 Review QuestionsDescribe the general guarantee under a fiduciary bond - ANSGuarantees the principal will
faithfully perform all duties prescribed by law or by the courts and will demonstrate financial
responsibility for the benefit of another individual or entity.
What are the 5 common responsibilities of fiduciaries? - ANS1. Administering property or
managing financial matters.
2. Promptly advise distributies of fiduciary appointments
3. Prepare and file an inventory and valuation of decedents property
4. Take possession of the estate or leave it with the party to be determined
5. Take the steps that are reasonably necessary to manage, protect, and preserve the estate.
Describe the authority of fiduciaries in handling an estate. Can they hire anyone? Does this
need approval? - ANSFiduciaries can perform the decedents or other beneficiaries contract,
prosecute and settle claims, and set or propose reasonable admin fees for themselves and
others. When appropriate appropriate, fiduciaries can hire lawyers, accountants, managers and
others to assist. Court must approve of significant discretionary actions.
What are 3 breaches of duty for which a fiduciary can be held liable? - ANS1. Failure to deal
with trust assets in a prudent manner.
2. Failure to use special skills for which the fiduciary was appointed.
3. Dealing with insiders or others for personal benefit.
Describe the purposes of the Uniform Probate Code - ANSReduces the cost of estate
administrators by eliminating the need for fiduciary bonds in most states.
When does the Uniform Probate Code (UPC) require a fiduciary bond? - ANSUPC Requires a
fiduciary bond only when a will requires one, a 3rd party with a financial interests in the estate
requests on, or a special fiduciary is appointed
What are the 7 fiduciary Classifications identified by the Surety & Fidelity Association of America
(SFAA)? - ANS1. Bonds in estates of deceased persons or persons presumed dead because of
long absence.
2. Bonds in estates of minors
3. Bond in estates of incompetents
4. Bonds in trust estates
5. Bonds in bankruptcy proceedings filed in the US District Courts
6. Bonds in equity courts or courts exercising equitable jurisdiction
7. Miscellaneous fiduciary bonds
Identify the 7 major duties of administrators and executors - ANS1. Give notice to the creditors
, 2. Collect estate assets
3. Complete inventory of the estates
4. Pay claims against the estate
5. Account for all receipts, disbursements and Assets managed
6. Distribute estate assets
7. Apply to court for discharge of admin duties
What/who is an administrator de bonis non (d.b.n) - ANSIndividual appointed by a probate court
to replace an original admin who died, resigned, or was discharged before completing the estate
administration.
What is the role of an administrator cum testatmento annexo - ANSIndividual appointed by a
probate court to admin the estate of a person who left a will but failed to appoint an executor, or
whose executor did not meet court approval or declined to serve as executor.
What is the role of an administrator cum testatmento annexo, de bonis non. - ANSIndividual
appointed to replace original admin cum testatmento annexo who died, resigned, or was
discharged before completing the estate administration
What is the role of an administrator pendente lite? - ANSIndividual appointed by a probate court
to temporarily preserve the assets of a decedents estate when the will is contested and
executor cannot qualify, or when a regular or permanent admin cannot be appointed for some
other reason
What are the 8 pieces of information needed to underwrite administrator bonds? - ANS1.
Applicant
2. Decedent
3. Distributies
4. Assets
5. Applicants Indebtedness to the estate
6. Operation of an ongoing business
7. Ongoing tax problems
8. Bond required at the demand of an interested party
Identify a guardians 5 duties in the estate of a minor - ANS1. Take possession of the minors
property
2. Invest the assets
3. Pay for the minors education using estate assets authorized by a court
4. To file accounting with the court at times required by law usually bi-annually and obtain court
approval
5. To file and seek court approval of a final accounting of the stewardship when the ward attains
majority
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