Creation of a Trust Flashcards
What are the requirements to create a trust?
Present intent to create a trust, trustee, beneficiary and trust property
What is a trustee?
A trustee manages the property and holds it for the benefit of the beneficiaries.
Will a trust fail if a trustee is not identified?
No. The court will appoint one.
What must a beneficiary be?
Definite and ascertainable.
Can the same person be the sole trustee and the sole beneficiary?
No. The trust will collapse.
What is the exception to the requirement of identification of beneficiaries?
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.
When is an heir or an heir at law determined?
Upon the decedent’s death.
Determining heirs and half-siblings
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.
What is trust res?
Trust property
What is the requirement for a trust res?
The trust property must be identifiable
Are promises to fund trust property in the future valid?
No, unless there is consideration.
What happens when a trust is invalid for lack of assets and is then later funded?
A trust arises at that same time if the settlor re-manifests his intention to create a trust.
Does a trust need witnesses, writing or delivery?
No, unless the trust is for real property then it would need to be in writing.
When do you need a written trust?
When the settlor intends to give real property.
When are oral trusts valid?
For personal property, oral trusts are valid but the terms need to be proved by clear and convincing evidence.
When will a court imply a trust even if no valid trust exists?
In a resulting trust, a constructive trust, or validity of a trust when provisions violate public policy.
What is a resulting trust?
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.
What is a constructive trust?
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.
What some trust provisions that violate public policy?
Provisions that restrain marriage or divorce or to the extent its creation was induced by fraud, duress, or undue influence.
What do courts look at to determine the construction of a trust?
The settlor’s intent.
What is precatory language?
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
What is a pourover will?
It is a will that makes a gift to a trust.
What documents do you need to have a pourover?
Will and the trust
