Classification of Trusts: A Comprehensive Guide for Law Students

Question 1

Which type of trust arises when a person transfers property without specifying the intended beneficiaries?

Accepted Answer

Resulting trust

Answer

Express trust

Answer

Implied trust

Answer

Constructive trust

Question 2

Which of the following is a key distinction between an express trust and an implied trust?

Accepted Answer

The settlor's intention is express in one and implied in the other

Answer

Express trusts can be created for any purpose, while implied trusts are limited to certain specific purposes

Answer

Express trusts require a written declaration, while implied trusts can be created orally

Question 3

Which of the following statements about constructive trusts is true?

Accepted Answer

They are imposed by the court to prevent unjust enrichment

Answer

They can only be created by a written declaration of trust

Answer

They are always express trusts

Answer

They require a transfer of legal title to the trustee

Question 4

Which of the following is an example of a resulting trust?

Accepted Answer

A transfer of property to a trustee without a declaration of trust

Answer

A transfer of property to a trustee for the benefit of a named beneficiary

Answer

A transfer of property to a trustee for an illegal purpose

Answer

A transfer of property to a trustee with fiduciary duties to the settlor

Question 5

What is the key difference between a resulting trust and an implied trust?

Accepted Answer

Resulting trusts are created by law, while implied trusts are created by the settlor's intention.

Answer

Implied trusts are created by law, while resulting trusts are created by the settlor's intention.

Answer

Resulting trusts arise when there is a failure of the express trust, while implied trusts arise when there is no express trust.

Answer

Implied trusts arise when there is a failure of the resulting trusts, while resulting trusts arise when there is no implied trust.

Question 6

Which of the following is a requirement for the creation of a valid charitable trust?

Accepted Answer

The trust must be for a public benefit.

Answer

The trust must be created in writing.

Answer

The trust must be for a specific purpose.

Answer

The trust must be administered by a charity commission.

Question 7

Which of the following is NOT a duty of a trustee?

Accepted Answer

Duty to delegate

Answer

Duty of care

Answer

Duty of loyalty

Answer

Duty to account

Question 8

What is the main difference between a fixed trust and a discretionary trust?

Accepted Answer

Fixed trusts give the trustees no discretion over the distribution of the trust property, while discretionary trusts do.

Answer

Discretionary trusts give the trustees no discretion over the distribution of the trust property, while fixed trusts do.

Answer

Fixed trusts are more common than discretionary trusts.

Answer

Discretionary trusts are more common than fixed trusts.

Question 9

What is the primary purpose of the rule against perpetuities?

Accepted Answer

To prevent the tying up of property in trusts for excessive periods.

Answer

To ensure that property is distributed to beneficiaries within a reasonable time.

Answer

To protect the interests of unborn children.

Answer

To promote the efficient administration of estates.

Question 10

Which of the following is NOT a type of constructive trust?

Accepted Answer

Express trusts

Answer

Trusts arising from fraud

Answer

Trusts arising from mistake

Answer

Trusts arising from the abuse of power

Question 11

Which of the following is NOT a defining attribute of an express trust?

Accepted Answer

No requirement for written documentation to be valid

Answer

Creation through the settlor's explicitly stated intention

Answer

Clear identification of specific property and beneficiaries

Answer

Potential for the settlor to retain some degree of control over the trust assets

Question 12

In resulting trusts, the presumption of advancement arises when:

Accepted Answer

Property is transferred from a parent to a child

Answer

Property is transferred between spouses

Answer

Property is transferred from a child to a parent

Answer

Property is transferred between siblings

Question 13

A fundamental distinction between express and implied trusts lies in:

Accepted Answer

Clarity of settlor's intention

Answer

Nature of trust property

Answer

Beneficiaries' rights

Answer

Tax implications

Question 14

A constructive trust comes into being when:

Accepted Answer

A court enforces a trust to rectify unjust enrichment

Answer

Property is acquired through deception or wrongdoing

Answer

An express declaration of trust is made

Answer

Property is gifted to another person

Question 15

A bare trust is characterized by:

Accepted Answer

Limited or no active duties or discretionary powers for the trustee

Answer

Full control and ownership of trust assets by the trustee

Answer

Automatic termination upon the settlor's demise

Answer

Obligation to distribute income to beneficiaries

Question 16

Which of the following is NOT an essential characteristic of an express trust?

Accepted Answer

Oral or written formation

Answer

Creation through the settlor's unambiguous intention

Answer

Precisely defined subject matter

Answer

Legal enforceability

Question 17

Which of the following is NOT a type of resulting trust?

Accepted Answer

Express Resulting Trust

Answer

Automatic Resulting Trust

Answer

Presumed Resulting Trust

Answer

Constructive Resulting Trust

Question 18

The primary distinction between express and implied trusts lies in:

Accepted Answer

Settlor's intention

Answer

Trust property

Answer

Enforceability

Answer

Beneficiaries

Question 19

A key element of the equitable maxim 'Equity follows the law' is:

Accepted Answer

Equity will not override established legal principles

Answer

Equity will supplement the law when necessary

Answer

Equity will create new rights and remedies

Answer

Equity will always prevail over the law

Question 20

Which type of trust is created when a settlor explicitly declares their intention to transfer property to a trustee for the benefit of a third party?

Accepted Answer

Express Trust

Answer

Implied Trust

Answer

Resulting Trust

Answer

Constructive Trust

Question 21

Which type of trust arises by operation of law, without any express or implied intention on the part of the settlor?

Accepted Answer

Resulting Trust

Answer

Express Trust

Answer

Implied Trust

Answer

Constructive Trust

Question 22

Which of the following is NOT a characteristic of a constructive trust?

Accepted Answer

It is always express

Answer

It is imposed by law to prevent unjust enrichment

Answer

It can arise from a variety of circumstances

Answer

It can be used to remedy a breach of fiduciary duty

Question 23

Which type of trust gives the trustee discretion in distributing the trust property among a group of beneficiaries?

Accepted Answer

Discretionary Trust

Answer

Fixed Trust

Answer

Protective Trust

Answer

Accumulation and Maintenance Trust

Question 24

Implied trusts arise:

Accepted Answer

By operation of law, regardless of the settlor's intention

Answer

Only when there is an express declaration of trust

Answer

When the settlor transfers property to a trustee with the intention of creating a trust

Answer

Only when the beneficiaries are minors

Question 25

A resulting trust arises when:

Accepted Answer

The settlor fails to dispose of all of the property in a trust

Answer

The trustee breaches their duties

Answer

The beneficiaries are unable to take the property

Answer

The settlor dies intestate

Question 26

Which of the following is a characteristic of a fixed trust?

Accepted Answer

The beneficiaries are specifically identified

Answer

The trustee has complete discretion over the distribution of income and capital

Answer

The beneficiaries have an absolute right to the property

Answer

The trust can be terminated by the settlor at any time

Question 27

Discretionary trusts:

Accepted Answer

Give the trustee absolute discretion over the distribution of income and capital

Answer

Are always irrevocable

Answer

Can only be created for charitable purposes

Answer

Do not have to be registered with the Land Registry

Question 28

Implied trusts arise when:

Accepted Answer

The settlor's intention to create a trust is presumed by law.

Answer

The settlor explicitly declares their intention to create a trust.

Answer

The beneficiaries have an equitable interest in the trust property.

Answer

The trustees have a legal obligation to hold the trust property.

Question 29

What is the primary purpose of a bare trust?

Accepted Answer

To hold legal title to property for the benefit of another person.

Answer

To protect assets from creditors.

Answer

To avoid inheritance tax.

Answer

To provide income for a beneficiary.

Question 30

Which of the following statements about charitable trusts is true?

Accepted Answer

They are exempt from inheritance tax.

Answer

They are only valid if they are created in writing.

Answer

They can be used for any purpose.

Question 31

Which of the following is a crucial characteristic of an express trust?

Accepted Answer

The settlor expresses their clear intention to establish a trust.

Answer

The trust property is automatically transferred to the trustee.

Answer

The beneficiaries are left unidentified.

Answer

The trust is established by operation of law.

Question 32

Which of the following best exemplifies an implied trust?

Accepted Answer

A trust created to support a child's education and upbringing.

Answer

A trust established through a formal investment fund.

Answer

A trust set up to manage charitable donations.

Answer

A trust created explicitly by a written document.

Question 33

What fundamental distinction exists between a fixed trust and a discretionary trust?

Accepted Answer

Fixed trusts have predetermined beneficiaries, while discretionary trusts grant the trustees the power to select beneficiaries.

Answer

Discretionary trusts have predetermined beneficiaries, while fixed trusts grant the trustees the power to select beneficiaries.

Answer

Fixed trusts have a defined duration, while discretionary trusts have an open-ended duration.

Answer

Discretionary trusts have a defined duration, while fixed trusts have an open-ended duration.

Question 34

Which of the following is a recognized method for establishing a constructive trust?

Accepted Answer

Through legal implications arising from specific circumstances, such as unjust enrichment.

Answer

By an explicit declaration of intention from the settlor.

Answer

By operation of law, regardless of the parties' intentions.

Answer

By a genuine mistake made by one or more parties involved.

Question 35

How did the Court of Chancery play a crucial role in the development of trusts?

Accepted Answer

Established trusts as a legal concept

Answer

Abolished the use of trusts

Answer

Limited trusts to charitable purposes

Answer

Prohibited trusts for personal gain

Question 36

Which of the following is a defining characteristic of an express trust?

Accepted Answer

It is intentionally created by a settlor

Answer

It arises by operation of law

Answer

It has an uncertain purpose

Question 37

In a constructive trust:

Accepted Answer

The court imposes a trust to prevent unjust enrichment

Answer

The settlor explicitly declares their intention to create a trust

Answer

The beneficial interest is automatically transferred to the trustee

Question 38

Which of the following is NOT a common method of classifying trusts?

Accepted Answer

By the number of trustees

Answer

By the purpose of the trust

Answer

By the method of creation

Answer

By the nature of the beneficial interest

Question 39

A trust that is created to provide for the education and maintenance of a child is known as a:

Accepted Answer

Maintenance trust

Answer

Charitable trust

Answer

Discretionary trust

Answer

Spendthrift trust

Question 40

Which of the following is NOT a legal duty of a trustee?

Accepted Answer

To invest the trust property in high-risk ventures

Answer

To act in the best interests of the beneficiaries

Answer

To preserve the trust property

Answer

To account for the trust property

Question 41

A trust that gives the trustee the discretion to distribute the trust property among a group of beneficiaries is known as a:

Accepted Answer

Discretionary trust

Answer

Fixed trust

Answer

Resulting trust

Question 42

Which of the following is NOT a way in which a trust can be terminated?

Accepted Answer

By the death of the settlor

Answer

By the achievement of the purpose of the trust

Answer

By the agreement of all the beneficiaries

Answer

By the order of the court

Question 43

A trust that is created for a purpose that benefits the wider community is known as a:

Accepted Answer

Charitable trust

Answer

Resulting trust

Answer

Express trust

Answer

Implied trust