A Trust Created by Will and Effective After the Death

question 6

Multiple Choice

A trust created by will and effective after the death of a testator is called a(n) :

• A) charitable trust.
• B) cy pres trust.
• C) inter vivos trust.
• D) testamentary trust.

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Definitions:

Capitalized

Expenses or costs that are added to the value of an asset and expensed over time through depreciation or amortization, rather than immediately.

Perpetuity

An annuity that pays a fixed amount of money for an infinite amount of time.

Amortized

The process of gradually paying off a debt over time in regular installments of interest and principal sufficient to repay the loan fully by its maturity date.

Preferred Stock

A type of stock that typically pays fixed dividends and has priority over common stock in dividend payments and asset liquidation.