Express Trusts: Invalid Trust Purposes; RAP

Question 1

What is the rule w regards to a trust’s purpose?

What does it mean to be “contrary to public policy”?

Answer 1

A trust purpose is invalid if it:

1. is illegal
2. performance requires a criminal or tortious act
3. otherwise contrary to public policy (example –> encourages immorality); or
4. violates RAP

Contrary to public policy:
- encourages another person to do any of the above, or to neglect parental, familial, or civic duties

Question 2

What happens if a CONDITION in a trust is invalid bc it is illegal or contrary to public policy?

Answer 2

1. settlor’s ALTERNATIVE desire controls if expressed;
2. If CONDITION SUBSEQUENT –> condition is invalidated, but trust is valid
3. if CONDITION PRECEDENT –> interest is valid UNLESS there is evidence that settlor’s wish would be to void the interest altogether if condition is unenforceable.

Question 3

What is the effect of RAP on non-vested property interest?

Answer 3

Under RAP –> non-vested property interest is invalid unless it is certain to vest or fail no later than 21 years after death of measuring life.

HOWEVER –> most states have adopted a wait and see approach, or an alternative 90 day period that would save the interest