Different Types of Trusts COPY Flashcards
What if an express trust fails?
if an express trust fails, courts may imply constructive or resulting trust.
Pet Trust
A Pet trust is statutory purpose trust. This instrument appoints an individual to enforce.
It terminates at the death of the last identified pet alive at trust creation.
Totten Trust
Totten trust, also known as a “payable-on-death” (POD) account, is a financial arrangement where an individual (the depositor) opens a bank account and designates a beneficiary to receive the account’s funds upon the depositor’s death. This setup allows for the direct transfer of assets to the beneficiary, bypassing the probate process.
This is not a joint bank account. Depositor controls & may revoke during life.
Example: A settlor may create a savings account trust by depositing money in a bank in the name of “A, in trust for B.
Life Insurance Trust
Life insurance trust is permissible even though not funded at creation.
Secret Trust
A secret trust is a provision in a will that looks like a gift but clear & convincing evidence shows an unwritten promise to care for an unnamed Beneficiary. This creates a constructive trust.
Semi-Secret Trust
A semi-secret trust is a provision in a will that directs property held in trust but no beneficiary or charity included. this creates a resulting trust.
Charitable Trust
A charitable trust requires valid charitable purpose that benefits charitable cause or broad section of the community.
How is the Charitable Trust created?
A charitable trust may be created by any of the methods for creation of an express trust, and there must be a settlor with capacity to convey, properly expressed intent, and a specific trust res.
Cy Pres Doctrine
if charity no longer exists or purpose impossible, ct will
use equity to fulfill T’s intent as close as possible (no lapse).
How can a charitable trust be enforced?
It can be enforced by settlor, state atty gen, co-Trustee, or individual w/ special interest in enforcement
Honorary Trust
An honorary trust has no ascertainable Beneficiary & no broad charitable purpose, but private goal of settlor.
Since there is no direct beneficiary, the trustee is expected to honor the trust’s terms, but if they choose not to, there may be no legal recourse to compel performance.
Otherwise, it creates resulting trust.
Constructive Trust
A constructive trust is an equitable device to prevent unjust enrichment from wrongdoing(fraud, duress, undue influence, violation of fiduciary duty).
Person with legal title is required to pass title to implied beneficiary.
Created by courts to prevent unjust enrichment, such as in cases of fraud or breach of fiduciary duty
Resulting Trust
It is an equitable remedy that arises when one person holds legal title to property, but it is implied or presumed that they are holding the property for the benefit of another due to the circumstances.
Imposed when the trust fails or there is excess trust property.
Property “results” back to the settlor or their estate.
Purchase-Money Resulting Trust
A purchase-money purchasing trust is when one party buys property but title is in name of another. It is a rebuttable presumption of resulting trust, but rebuttable presumption of gift if a family relationship.
