Creating the trust Flashcards
What are the 5 ways to create a trust ?
- Transfer property to another person as trustee during the settlor’s lifetime
- A property owner declares that she holds identifiable property as trustee
- Transfer by will or other disposition taking effect on the settlor’s death
- Exercise of a power of appointment in the trustee’s favor;
- Petition to the circuit court by an interested party
Requirements for the creation of a trust - settlor
- The settlor must have capacity and intent
Does not have to be evidence by the trust instrument, but an oral trust must be established by clear and convincing evidence
Requirements for the creation of a trust-beneficiaries
A trust must have beneficiaries. If there are no ascertainable beneficiaries the trust is invalid unless it is a
- charitable trust
- trust for animal care
- Or a trust for a non charitable purpose without an ascertainable beneficiary
Can a trustee select a beneficiary form an indefinite class ?
Yes the UTC allows it this if exercised within a reasonable time
When are beneficiaries presumed to accept an interest in a trust ?
unless they affirmatively disclaim it
Requirements for the creation of a trust-trustee
A trust must have a trustee with duties to perform and
- The trustee must have at least enough capacity to enter into contracts
- Trustee is entitled to reasonable compensation
- The trustee may be removed by the court on its own motion or on request if there is a breach of trust, lack of cooperation, unfitness, or substantial change in circumstances
Can the same person be the sole trustee and sole beneficiary of a trust ?
No, but the settlor can be the trustee
Charitable trusts do not need …..
ascertainable beneficiaries
What are charitable purposes ?
- Relief of poverty
- Advancement of education or religion
- Promotion of health, governmental, or municipal purposes
- of other purposes beneficial to the community
Who may maintain a proceeding to enforce a charitable trust ?
- The VA AG
- Settlor
- or qualified beneficiary
Animal care trusts
UTC allows for trust for the care of an animal that was alive during the settlor’s lifetime; the utc allows a settlor to name a person to enforce the trust and if no person is named the court will appoint one
Restrictions on animal care trusts
- Trust cannot last longer than the last surviving animal’s life
- Assets left after the animal’s death can be used to pay for the animal’s burial and similar expenses
- If the amount set aside for the animal exceeds the amount required for care, any excess will be returned to the settlor or the settlor’s estate or be disposed of according the residuary provision of the trust or will
Non Charitable trust without ascertainable beneficiary
- cannot last longer than 21 years
- enforced by person appointed in the terms of the trust, or by the court
- settlors do not have power to place excessive amounts in trust without ascertainable beneficiaries, any excess will be returned to the settlor or the settlor’s estate
VA uniform stautuory rap
- Remote interests remain valid if they satisfy the common-law rule’s stringent standard; but remote interests are also if they actually vest of fail within 90 years of the creation of the interest
- USRAP allows a court to reform any trust that would violate the common law rule and thus be governed by the 90 year wait and see rule; the court will reform the trust must closely to the transferor’s plan; reformation is not required if the trust satisfies the common law rule
Does RAP apply to charitable trusts ?
No
