Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

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Prepare for the Certified Anti-Money Laundering Specialist Certification (CAMS) exam. Study with multiple choice questions, each with hints and explanations. Boost your chances of success!

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What does a 'Bare Trust' imply regarding the duty of trustees?

Active management of the trust assets
To sell assets at market value
Only to transfer the trust property when demanded by beneficiaries
To invest assets in secure funds

The correct answer is: Only to transfer the trust property when demanded by beneficiaries

A 'Bare Trust' implies that the duty of trustees is primarily to hold the trust assets for the beneficiaries without engaging in active management or investment decisions. The role of trustees in a bare trust is fundamentally limited. They must simply retain the assets and, upon the beneficiaries' request, transfer the legal ownership of those assets to them. This type of trust means that the beneficiaries have an unequivocal entitlement to the assets, and the trustees have no discretion regarding how to manage or sell the assets. In contrast, other options suggest duties that go beyond simply holding and transferring assets, such as actively managing the trust or making decisions about investments, which do not align with the nature of a bare trust. The bare trust structure is designed for simplicity and direct access for the beneficiaries, emphasizing clear ownership and transferability rather than management or investment actions.