Creation of a trust

Question 1

6 basic trust requirements

Answer 1

1. has a valid legal purpose
2. settlor must be competant
3. must have a trustee (but the ct may appt one)
4. settlor must intend to create a trust
5. settlor must name at least one identifiable beneficiary
6. settlor must satisfy each of the req’s

Question 2

Valid legal purpose

Answer 2

means the trust must
1. have a reason to exist
2. for the trustee to hold and manage the assets
3. for another person

Question 3

The trusts purpose cannot

Answer 3

be illegal or encourage illegal behavior

Question 4

Trusts cannot violate public policy
- limits include

Answer 4

1. incentivizing someone to change their religion
2. incentivizing divorce
3. rewarding someone for not marrying
4. rewarding family members for not being in contact with each other

Question 5

The settlor must be competent

testamentary and revocable trusts require

Answer 5

the same capacity as a will

Question 6

The settlor must be competent

The standard for creating a irrevocable trust is

Answer 6

higher then for a will or a testamentary trust

Question 7

Identifiabe beneficiary relationship with trustee

The trust structute requires that the beneficiary or beneficiaries be able to

Answer 7

hold the trustee accountable for exercising the trustees fiduciary duties

Question 8

Trust must have one or more identifiable

Answer 8

beneficiaries

Question 9

How to put property in a trust

property

Answer 9

must be deeded (or redeeded) to the trustee of the trust

Question 10

How to put property in a trust

bank accounts, stocks, secuties, and the like

Answer 10

must be retittled in the name of the trust

Question 11

How to put property in a trust

Personal property

Answer 11

should be listed on a schedule attached to an instrument transferring it to the trustee

Question 12

A person can transfer property to

Answer 12

someone else in trust

Question 13

Transfering property to self as trustee

Answer 13

declaration of trust

Question 14

A trust that has to be funded

Answer 14

pour-over trust

Question 15

Uniform Testamentary Additions to Trusts Act (UTATA)

A will may validly devise property to the trustee of a trust established or to be established

Answer 15

1. During the testators lifetime by the testator, by the testator and some other person, or by some other person, including funded or unfunded life insurance trusts, althrough the trustor has reserved any or all rights of ownership of the insurance contracts,
   OR
2. at testators death by testators devise to the trustee, in testators will or other instrument the terms are set forth, executed before or concurrently with or after will or in another individuals will that has predecessed the testator, regardless of the existance, size, or character of the corpus of the trust, the devide is not invalid bc the trust is amendable or revocable, or bc the trust was amended after the execution of the will of the actors

Question 16

Acceptance and resignation of trusteeship

A person who is nominated as a trustee is under no obligation to

Answer 16

serve as trusee and decline the nomination

Question 17

Acceptance and resignation of trusteeship

To accept, the designated trustee must

Answer 17

make some sign of affirmative acceptance

Question 18

Acceptance and resignation of trusteeship

Once accepted, a trusteeship,
how to resign

Answer 18

must follow a procedure to resign

Question 19

UPC 701 Accepting or declining trusteeship

A person designated as trustee accepts the trusteeship

Answer 19

1. by substantially complying with a method of acceptance provided in the terms of the trust OR
2. if the terms do not provice a method of acceptance provided in the terms is NOT expressly made exclusive, by accepting delivery of the trust property, exercising powers of performing duties as trustee, or otherwise indicating acceptance of the truseeship

Question 20

UPC 701 Accepting or declining trusteeship

A person designated as trustee who has not yet accepted the trusteeship may

Answer 20

reject the trusteeship

Question 21

UPC 701 Accepting or declining trusteeship

A designated trustee who does not accept the trusteeship within a reasonable time after knowing of the designation is deemed

Answer 21

to have rejected the trusteeship

Question 22

UPC 701 Accepting or declining trusteeship

A person designated as trustee, without accepting hte trusteeship may:

Answer 22

1. act to presetve the trust property if, within a reasonable time, after acting, the person sends a rejection of the trusteeship to the settlor, or if the settlor is dead or lacks capactiy, to a qualified beneficiary, and
2. inspect or investigate trust property to determine potential liability under enviromental or other law or for any other purpose

Question 23

A trust should specify the method by which the trustee

Answer 23

accepts the position and if that method is the exclusive way of accepting

Question 24

A person can accept the role (and duties) of a trustee without formal procedure and sometimes

Answer 24

without even realizing that htey have accepted the role of fiduciary