CERTIFIED TRUST AND
FIDUCIARY ADVISOR CTFA
PRACTICE EXAM 2026
COMPLETE
Question 1: A �duciary account is established to hold assets for a minor under a state transfers-to-minors statute. In what capacity is the person managing the property acting?
Choices:
1) Custodian 2) Executor 3) General partner 4) Trust protector
Correct Answer: Custodian
Explanation: A custodial account under a transfers-to-minors statute is administered by a custodian for the minor until the applicable termination age.Page 1
Question 2: Two unrelated investors own real property as tenants in common. Which statement is correct?
Choices:
1) Each owner must hold an equal percentage 2) Each owner may hold a di�erent percentage and may generally transfer that owner’s interest 3) The property automatically passes to the surviving co-owner at death 4) Tenancy in common is available only to spouses Correct Answer: Each owner may hold a di�erent percentage and may generally transfer that owner’s interest Explanation: Tenants in common may own unequal shares, and each owner’s interest is generally transferable and passes through that owner’s estate rather than automatically by survivorship.Question 3: A taxpayer has a 35% marginal federal income tax rate. What does the marginal rate represent?
Choices:
1) Tax divided by total income 2) The average rate paid on all gross income 3) The rate generally applied to the taxpayer’s next dollar of taxable income 4) The capital gains rate in every transaction Correct Answer: The rate generally applied to the taxpayer’s next dollar of taxable income Explanation: The marginal tax rate is the rate generally applicable to the next dollar of taxable income, while the e�ective rate is an average measure.Page 2
Question 4: Which investment represents an ownership interest in a corporation?
Choices:
1) Corporate bond 2) Treasury bill 3) Certi�cate of deposit 4) Common stock
Correct Answer: Common stock
Explanation: Common stock represents an equity ownership interest in a corporation, while bonds and CDs are debt or deposit instruments.Question 5: Before accepting a new �duciary account, the institution should identify the client, bene�cial owners where applicable, bene�ciaries, and other relevant
parties primarily to support:
Choices:
1) Know Your Client and due-diligence requirements 2) Portfolio duration management 3) Tax-loss harvesting 4) Principal-and-income allocation
Correct Answer: Know Your Client and due-diligence requirements
Explanation: KYC and due diligence require the �duciary to understand relevant parties, the purpose of the relationship, and associated legal and compliance risks.Page 3