CTFA Practice Questions - Certified Trust And Fiduciary Advisor (CTFA) Exam

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A trust instrument directs the trustee to retain a large block of employer stock, but concentration risk has become material. What is the BEST first step for the fiduciary?

Sell the position immediately without reviewing the instrument Document the risk, review the retention language and applicable law, and seek counsel or court guidance if authority is unclear Transfer the stock to the beneficiaries without a receipt or release Ignore the issue because settlor-selected assets can never be questioned

Correct Answer:

Document the risk, review the retention language and applicable law, and seek counsel or court guidance if authority is unclear

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