Creation of a Trust

Question 1

What are the requirements to create a trust?

Answer 1

Present intent to create a trust, trustee, beneficiary and trust property

Question 2

What is a trustee?

Answer 2

A trustee manages the property and holds it for the benefit of the beneficiaries.

Question 3

Will a trust fail if a trustee is not identified?

Answer 3

No. The court will appoint one.

Question 4

What must a beneficiary be?

Answer 4

Definite and ascertainable.

Question 5

Can the same person be the sole trustee and the sole beneficiary?

Answer 5

No. The trust will collapse.

Question 6

What is the exception to the requirement of identification of beneficiaries?

Answer 6

The UTC states that a trust can be created for a noncharitable purpose without a definite or ascertainable beneficiary. These will only be valid for 21 years. The time starts from the date the trust was created.

Question 7

When is an heir or an heir at law determined?

Answer 7

Upon the decedent’s death.

Question 8

Determining heirs and half-siblings

Answer 8

In all states, when a decedent dies intestate and has half-siblings, the half-siblings are not considered heirs if the decedent died with surviving descendents. Additoinally, most states say that the existence of a surviving spouse will prevent a decedent’s siblings from becoming heirs.

Question 9

What is trust res?

Answer 9

Trust property

Question 10

What is the requirement for a trust res?

Answer 10

The trust property must be identifiable

Question 11

Are promises to fund trust property in the future valid?

Answer 11

No, unless there is consideration.

Question 12

What happens when a trust is invalid for lack of assets and is then later funded?

Answer 12

A trust arises at that same time if the settlor re-manifests his intention to create a trust.

Question 13

Does a trust need witnesses, writing or delivery?

Answer 13

No, unless the trust is for real property then it would need to be in writing.

Question 14

When do you need a written trust?

Answer 14

When the settlor intends to give real property.

Question 15

When are oral trusts valid?

Answer 15

For personal property, oral trusts are valid but the terms need to be proved by clear and convincing evidence.

Question 16

When will a court imply a trust even if no valid trust exists?

Answer 16

In a resulting trust, a constructive trust, or validity of a trust when provisions violate public policy.

Question 17

What is a resulting trust?

Answer 17

A resulting trust generally arises where an express trust fails or an express trust does not make a total distribution. The Court will imply a trust and make the settlor or his heirs the beneficiary.

Question 18

What is a constructive trust?

Answer 18

A constructive trust is an equitable remedy that applies when there is fraudulent, wrongful, or otherwise unconscionable conduct and unjust enrichment. The takes of the original will would hold the testator’s property in a constructive trust.

Question 19

What some trust provisions that violate public policy?

Answer 19

Provisions that restrain marriage or divorce or to the extent its creation was induced by fraud, duress, or undue influence.

Question 20

What do courts look at to determine the construction of a trust?

Answer 20

The settlor’s intent.

Question 21

What is precatory language?

Answer 21

Precatory language in a trust usually includes such terms as the testator’s “request,” “hope,” or “desire” that property be given to a certain person or be disposed of in a particular manner

Question 22

What is a pourover will?

Answer 22

It is a will that makes a gift to a trust.

Question 23

What documents do you need to have a pourover?

Answer 23

Will and the trust