Chapter 6 - Trusts Flashcards
Beneficiary(ies)
those that benefit from the trust
Requirments of a trust
Need to have at least one beneficiary that is different from the trustee
Inter Vivos Trust
Trust created during settlor’s life
Testamentary Trust
Trust created in a will, at testators death
Basic Inter Vivos Trust (Deed of Trust)
A settlor transfers title to a trustee (legal title) and the beneficiary(ies) have equitable title
Inter vivos trust (decarlariont of trust)
a settlor declares self as trustee (legal title) and beneficiary(ies) have equitable titles
Revocable trust
the settlor can revoke the trust at any time and regain control
Modern Rule: trust is revocable unless expressly stated it is not revocable
Testamentary Trust
irrevocable
Is a testamentary trust disfavored?
YES, prefer Inter Vivos
Have to have continued court supervision
Managerial Intermediation
Trustee(s) hold legal title to and exercise managerial responsibility over trust corpus or res
Beneficiary(ies) - hold equitable title to and have beneficial ownership of trust corpus or res
Trust property, trust corpus, res
mean the same thing
Problem with Managerial Intermediation model
beneficiary(ies) are at mercy of trustee(s) mismanagement
Elements to create a trust
- Intent to create trust
- Trust property (or corpus or res)
- Ascertainable beneficiaries (unless charitable trust)
- Written instrument (if testamentary trust or land/statute of fraud)
Elements to create a trust
- Intent to create trust
- Trust property (or corpus or res)
- Ascertainable beneficiaries (unless charitable trust)
- Written instrument (if testamentary trust or land/statute of fraud)
The beneficiary principle
CL: have to be ascertainable beneficiaries (can’t be too vague)
Uniform Trust Code: can select a beneficiary from an indefinite class, is valid;
