FL Trusts Flashcards
elements of a trust
A valid trust must include 1) the present intent to create a trust with no precatory language, 2) a settlor over 18 with capacity, 3) a valid legal purpose, 4) trust res, 5) ascertainable beneficiaries, and 6) a trustee.
if a trust is being funded by land:
it must comply with the statute of frauds and therefore be in writing.
testamentary trust
has the intent to take effect upon someone’s death.
testamentary trusts need to comply with will formalities: 1) signed by will formalities 2) two witnesses sign in presence of settlor and in presence of each other
Elements of a Trust: 1) Present intent to create a trust
No precatory language- nothing about the future. Cant be speculative. Cant say “im thinking about creating a trust”
Elements of a trust: 2)
There must be a settlor- person who is creating a trust
i. Must be 18 or older and have capacity.
elements of a trust: 3) there has to be trust res.
i. The property itself has to be in existence, must be a description and identify the property
ii. Normally, trust could be oral. But if trust is being funded by land, must comply with SOF
1. SOF would require that the trust be in writing if it involves land
elements of a trust: 4) valid legal purose
the trust must have a valid legal purpose
elements of a trust: 5) ascertainable beneficiaries
Must include definite, certain people
elements of a trust: 6) must have a trustee
i. If a trustee is not named, the trust will not fail. A court will appoint one for you
Trusts in FL are:
are presumed revocable unless it expressly states that it is irrevocable.
a. If irrevocable, nothing can change. Creditors cant go after
spendthrift provision
b. a Spendthrift provision prevents voluntary or involuntary transfer of the beneficiary’s interest.
i. The beneficiaries can’t get it nor can the creditors get it.
1. Exception for creditors: child support, alimony, or government creditors can reach the beneficiary’s interest
(Where the settlor is concerned that the beneficiaries are going to blow the money)
charitable trust
- No ascertainable beneficiaries. Must have a broad public/charitable purpose.
- May be perpetual. Not subject to RAP
- Cy pres: if the purpose of the charity has failed/no longer exists, the court will select another charity to fulfill the intent of the settlor.
Cy Pres
if the purpose of the charity has failed/no longer exists, the court will select another charity to fulfill the intent of the settlor.
Discretionary trusts
i. When the trustee is given total discretion to distribute the assets. Beneficiary cant tell trustee what to do with the assets.
ii. Trustee distributes on behalf of settlor’s intent.
support trust
i. If the trust sets up to support the beneficiary’s daily existence (food, housing, daily life) but no luxuries.
Pour Over trust
Contents of a will pours over into a trust.
Elements:
1. The trust must be established before or at the time the will was created
2. Trust identified in the will
3. Trust terms in writing
honorary trust
Expenses set aside for grave site or pet
- Pet must be alive during the settlor’s lifetime
- Ends when the pet dies
- Needs to be in writing
Totten trust
Bank account where someone takes care of it for you until they’re 18.
Equitable trusts:
Something happened and now court the court is going to say we have an official legal trust.
resulting trust (type of equitable trust)
a. If the trust itself fails in whole or part: one of the elements fails or formalities fails. Court will enforce it and call it a resulting trust.
b. Can sometimes argue resulting trust if the purpose of the trust is satisfied but there is excess funds/property and it reverts back to the settlor or settlor’s estate
Constructive trust (type of equitable trust)
a. Court will enforce or impose a trust to avoid or prevent unjust enrichment.
i. Looking for fraud. If trustee screws up, someone misrepresents, etc
Trustee duties
Must be a named trustee
Must be 18 yrs. or older and competent to hold/acquire property Must act prudently and in good faith to comply and fulfill the intent of the settlor and to be prudent to look out for the beneficiaries. Trustee has a fiduciary duty to beneficiaries. In these essays, trustee may be doing something wrong
specific duties of trustee
1) act like prudent investor, 2) duty of loyalty, duty to earmark property
Trustee has to act like a prudent investor:
a. Invest and manage the property or funds conservatively and prudently. Look out for beneficiaries
b. Reasonable diversification
i. Don’t put all eggs in one basket/all money in one account or stock. No diversification here