Sample CTFA Exam Questions

Following are sample exam questions.  The exam will consist of questions with a similar format:

1. A trust you administer gives the power to an outside advisor to direct investments. The trustee has the duty to act in accordance with the exercise of that power. You believe that the advisor is abusing this power and is directing you to make an imprudent investment.  You should:
   1. Tell the advisor he must first obtain the consents of the current beneficiary and presumptive remaindermen.
   2. Confront the advisor and, if the situation cannot be remedied, seek court guidance.
   3. Follow the advisor's directions nonetheless.
       
2. Your client is married and has a net worth of $4 million, which includes a jointly owned house worth $250,000. He has a simple will. The BEST advice to reduce overall estate taxes is that he:
1. Get a power of attorney.
2. Give $13,000 per year to each of his two children.
3. Incorporate a credit shelter trust provision in his will.
4. Transfer the house ownership completely to his wife.
   
3. Distributions from which of the following CANNOT be rolled over into an IRA?
   1. 401(k)
   2. Money Purchase Pension Plan
   3. Profit Sharing Plan
   4. Rabbi Trust
       
4. John creates a trust with income during life to Sam, the remainder to Sue. John retains the right to amend or revoke the agreement. Sue will have to disclaim her interest in the trust within 9 months of:
   1. John's death
   2. Sam's death
   3. The creation of the trust
   4. The appointment of the executor or administrator of Sam's estate

Answer Key:

1. b
2. c
3. d
4. a