DC Bar Practice Questions - District Of Columbia Bar Examination Exam

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A trust instrument directs the trustee to distribute income to a beneficiary but gives the trustee 'sole and absolute discretion' over principal distributions. A beneficiary challenges a principal decision. A court reviewing the exercise of such discretion will generally:

Substitute its own judgment for the trustee's in all cases Intervene only if the trustee acted in bad faith, dishonestly, or with an improper motive (abuse of discretion) Never review a discretionary trustee decision Order the trust terminated

Correct Answer:

Intervene only if the trustee acted in bad faith, dishonestly, or with an improper motive (abuse of discretion)

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