CTFA Cheat Sheet 2026

The 30 highest-yield CTFA facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. An asset's true value, price, or the amount for which it can fairly be anticipated to trade on the open market is: → Fair market value
2. You can refer to balance sheet and income statements that are crucial planning tools for creating and maintaining personal financial plans as: → Personal financial statements
3. Which type of pension plan guarantees a specific monthly benefit at retirement regardless of investment performance? → Defined benefit (DB) plan
4. Tax advantages are provided via flexible spending accounts and tax-deferred retirement plans. You may be able to__________ against some retirement plans. → Borrow
5. In intestate succession, when a decedent leaves a spouse and two adult children, which statement is most commonly true under state law? → The spouse and children share the estate according to state statute
6. What is a pour-over will in the context of estate planning? → A will that directs probate assets into an existing trust
7. Which federal law governs the fiduciary standards applicable to employee benefit plan trustees under qualified retirement plans? → Employee Retirement Income Security Act (ERISA)
8. Which document allows an individual to name a personal representative and specify how their estate should be distributed after death? → Last will and testament
9. Which type of trust allows the grantor to retain a fixed annuity payment for a specified term, with the remainder passing to heirs at reduced gift tax value? → Grantor Retained Annuity Trust (GRAT)
10. Under the Uniform Trust Code, what is the primary purpose of a 'no-contest' (in terrorem) clause in a trust? → To disinherit beneficiaries who challenge the validity of the trust without probable cause
11. What is beta in the context of investment management? → A measure of a security's or portfolio's volatility relative to the overall market
12. When a trustee fails to diversify trust investments and the trust suffers a resulting loss, the trustee may be liable for which remedy? → Surcharge equal to the loss caused by the failure to diversify
13. It is essentially a technique for creating financial statements that only records transactions involving genuine cash outlays. → Cash basis
14. Under IRC Section 4941, which transaction between a private foundation and a disqualified person constitutes prohibited self-dealing? → Selling foundation-owned property to a substantial contributor at fair market value
15. Under SECURE 2.0, unused 529 plan funds may be rolled over to which type of account subject to specific conditions? → Roth IRA for the 529 beneficiary
16. Under the principal and income rules, how are stock dividends typically allocated between income and principal in a trust? → Cash dividends are income; stock dividends are principal
17. Under the 'worst-in, first-out' tier system for Charitable Remainder Trusts, in what order are distributions characterized for income tax purposes? → Ordinary income first, then capital gains, then tax-exempt income, then return of corpus
18. A Pooled Income Fund is structurally most similar to which type of investment vehicle? → A mutual fund that allocates income to investors proportionally based on units held
19. Which measure is used to evaluate a bond fund manager's ability to add value above the benchmark after fees? → Alpha
20. When a fiduciary files IRS Form 1041 for a complex trust, which of the following income items is NOT eligible for the distribution deduction? → Capital gains allocated to corpus and not distributed
21. The 10-year rule under the SECURE Act requires most non-spouse inherited IRA beneficiaries to do which of the following? → Distribute the entire inherited IRA within 10 years of the owner's death
22. A trust contains a spendthrift clause. Which of the following creditors can typically still reach the beneficiary's trust interest despite this clause? → Child support and alimony claimants under most state laws
23. An excess of spending over revenue that results in both insufficient finances and a decline in net worth is known as: → Cash deficit
24. Which type of IRA allows qualified distributions to be completely tax-free in retirement? → Roth IRA
25. The ability to pay off debts on time is indicated by the total monthly loan payments divided by the gross (before-tax) income for the previous month. → Debt service ratio
26. Which IRS form is used to file the annual income tax return for a complex trust? → Form 1041
27. What is the federal estate tax exemption amount for 2024 per individual? → $13.61 million
28. Which type of Charitable Remainder Trust pays a fixed percentage of the trust's fair market value, revalued annually? → Charitable Remainder Unitrust (CRUT)
29. Which statute governs the delegation of trustee investment functions to agents such as investment advisors? → Uniform Prudent Investor Act (UPIA)
30. Which charitable giving vehicle allows donors to make an irrevocable contribution to a sponsoring organization and recommend grants to charities over time? → Donor Advised Fund (DAF)