Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

A contingent trust is indeed defined as a trust that requires specific conditions to be met before any funding or distribution takes place. This means that the trust's operation is not clear until events, circumstances, or conditions outlined in the trust document occur. For example, a common scenario is where the trust might specify that funds are to be distributed only when a beneficiary reaches a certain age or achieves a certain milestone.

Understanding this distinction is critical in the context of estate planning and asset distribution, as it allows the grantor to maintain control over their assets and the timing of their distribution based on the beneficiaries' situations. This makes it significantly different from other types of trusts, such as those designed for immediate distribution, which do not have such conditional requirements. Other options suggest alternative scenarios, but they do not encompass the defining characteristic of a contingent trust, which is the reliance on specific conditions for funding.