Key Control Factors in Personal Trust Account Administration

A

The administration of personal trust accounts is primarily controlled by the terms of the governing instrument, which is the document that establishes the trust and outlines its purpose, terms, and conditions. The governing instrument may be a trust agreement, a will, or another legal document. It is essential to follow the provisions of the governing instrument to ensure that the trustee's actions are consistent with the trust's objectives.

A will is a legal document that directs the distribution of a person's assets after death, including the creation of a trust. However, a will does not control the administration of a trust while the grantor is alive, as a trust is a separate legal entity with its own terms and conditions.

A trust agreement is a legal document that creates a trust, defines its terms, and sets forth the rights and obligations of the trustee and the beneficiaries. The trust agreement is the primary document that governs the trust's administration, and the trustee must comply with its terms.

A court order may affect the administration of a trust if a legal dispute arises between the trustee and the beneficiaries, or if the trustee needs court approval to take certain actions. However, a court order does not control the trust's day-to-day administration, and the trustee must still adhere to the terms of the governing instrument.

Therefore, the correct answer is B. A will does not control the administration of a trust while the grantor is alive, as a trust is a separate legal entity with its own terms and conditions.