beneficiary Flashcards
BENEFICIARIES
A trust cannot exist without someone to enforce it. Thus, an ascertainable beneficiary is necessary to the validity of every trust except charitable and honorary trusts
Qualified Beneficiary
A qualified beneficiary is a beneficiary who, on the date the beneficiary’s qualification is determined, is: (1) a current beneficiary, or (2) a first-line remainderman
Notice to and Acceptance by Beneficiary
Notice to a beneficiary is not essential to the validity of a trust. Lack of such notice may indicate, however, that no trust was intended. Acceptance by the beneficiary is required, but can take place after a
valid trust is created. Acceptance may be express or implied and is generally presumed
Time for Making Disclaimer
Many state disclaimer statutes require that a disclaimer be made within nine months of the interest’s creation, and that is the relevant
period for federal gift tax purposes. The time limit does not apply to a beneficiary who is under age 21. A disclaimer is timely if made within nine months after the beneficiary attains age 21.
Disclaimer Estoppel
A beneficiary may be estopped from making a disclaimer if they have exercised any dominion or control over the interest or accepted any benefits under the trust
Definiteness of Beneficiaries Under Private Trust
There must be definite beneficiaries to have a private trust (not required in charitable trusts).
Class Gifts
Beneficiaries may be designated by generic descriptions such as “children.” Beneficiaries may be unascertainable when the trust is created as long as they are ascertainable when they are to benefit,
for example, “to my children and upon their death, to my then surviving grandchildren.”
Unascertained Beneficiaries
Beneficiaries may be “definite” even though not yet ascertained (for example, unborn children). Beneficiaries must be ascertainable by the time their interests are to come into enjoyment
