Question

If the Trust Agreement is silent with respect to a certain cash transaction, the Trust Administrator should look first to the _____________.

1) Court of Jurisdiction
2) Principal and Income Law of the state
3) Grantor
4) OCC

Answer 1

When a Trust Agreement lacks guidance on a cash transaction, the Trust Administrator should refer to the state's Principal and Income Law for direction.

Step-by-step explanation:

If a Trust Agreement is silent with respect to a certain cash transaction, the Trust Administrator should look first to the Principal and Income Law of the state. Trusts are governed by state law, and when an agreement does not specify how to handle a situation, the default provisions of state law typically provide the guidance needed.

This approach is in accordance with the Principle of Justice in acquisition and transfer, ensuring that the administration of the trust respects the legal entitlements of individuals associated with the trust.