Charitable Trusts and Other forms

Question 1

Charitable Trust Def

Answer 1

Any trust which confers a substantial BENEFIT upon SOCIETY

Ex: to help the poor, advance education, help the sick, promote education

Question 2

Creating a chairtable trust

Answer 2

Same as private express trust:

(1) manifestation of trust intent (2) at testator’s death by will or settlor’s lifetime by declaration of trust/transfer in trust, (3) present existing res, and (4) charitable purpose

Question 3

Beneficiary requirement in charitable trust

Answer 3

No ascertainable person or group. SOCIETY is the beneficiary

Beneficiaries must be indefinite

Question 4

RAP

Answer 4

RAP does not apply to charitable trusts! Can endure forever

Question 5

Cy Pres

Answer 5

When a charitable trust created is IMPRACTICABLE, court will select an alternative under cy pres (“as near as possible”)

Court must find GENERAL CHARITABLE INTENT on the part of the settlor to invoke cy pres. Presumed under the UTC

NOTE: if Settlor has SPECIFIC CHARITABLE INTENT, cy pres CANNOT be used (would use resulting trust)

Extrinsic and Intrinsic evidence may be used to ascertain settlor’s general or specific intent

Question 6

Pour Over Wills

Answer 6

When settlor creates an inter-vivos trust, with a provision in her will devising part or all of the estate to the trustee of the trust (wills lecture)

Question 7

Honorary Trusts def

Answer 7

A trust which has NO ascertainable beneficiary and confers NO substantial benefit upon society (thus can’t be private express or charitable trust)

Essentially a goal of the settlor

Generally used for benefit of pets or maintenance of burial sites

Question 8

Trustee in Honorary Trust

Answer 8

Not REQUIRED to carry out settlor’s goal, merely the power to carry it out

If trustee fails to carry out settlor’s wishes, then the trust itself fails (compare with other trusts where a court will simply appoint a new trustee and not let the trust fail)

Question 9

RAP in honorary trusts

Answer 9

RAP problems come up often with honorary trusts

Usually struck b/c no measuring life for the trusts and thsu violate RAP and becomes a resulting trust

NOTE: UTC allows honorary trust to endure for 21 years

Question 10

Totten Trust

Answer 10

Always a bank account.

Named beneficiary takes whatever is left in the account at death of the owner of the account

Not really a trust, more of a will substitute

Depositor/settlor: NO fiduciary duties owed, free to use money however she wants, beneficiary merely takes whatever is left

Question 11

Totten Account becoming a trust

Answer 11

Look for manifestation of trust intent by settlor to make this lowly totten account a full blow private express trust

No magic words necessary to create a trust, thus can be shown through manifestations. If becomes trust, triggers all the bullshit like fiduciary duties