FL Trusts Missed Rules Flashcards

1
Q

Under Florida law, the court can ____________ the terms of a trust if it becomes ______________ or not economical to carry on the trust as originally written.

A

modify; impracticable

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2
Q

Beneficiaries, co-trustees, or the settlor ______ unilaterally modify the trust without court approval.

A

cannot

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3
Q

To create a valid trust in Florida, the _________ (the person creating the trust) must be of sound mind and over 18 years old

A

settlor

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4
Q

Karl, a resident of Florida, included a no-contest clause in his trust, stipulating that any beneficiary who contests the trust would be disinherited. His son, Patrick, is not satisfied with the distribution and wants to contest the trust. What would likely happen if Patrick contests the trust under Florida law?
Choose only ONE best answer.

(A) Patrick will be disinherited because of the no-contest clause.

(B) Patrick can contest the trust without risking his inheritance due to the no-contest clause.

(C) Patrick can contest the trust, but the court will decide whether he should be disinherited.

(D) Patrick cannot contest the trust because it contains a no-contest clause.

A

(B) Patrick can contest the trust without risking his inheritance due to the no-contest clause.

Why?

Because, in FL, no contest clauses are unenforceable in a trust.

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5
Q

A _____________ trust is an informal trust created during the lifetime of the grantor by depositing money into an account with the understanding that upon the grantor’s death, whatever is in that account will pass to the named beneficiary.

A

Totten trust

Note = also known as a “payable-on-death” (POD) account.

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6
Q

What are remedies for misappropriation of trust assets?

A

(1) removal of the trustee;
&
(2) recovery of the misappropriated assets.

(Misappropriation of trust assets is a serious breach of fiduciary duty)

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7
Q

A trustee does not have the power to change or determine the _____________ of the trust.

A

purpose of the trust

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8
Q

A ___________ trust is a remedial device imposed by the court to prevent unjust enrichment when property has been obtained by wrongful means (such as fraud, duress, undue influence, or breach of fiduciary duty).

A

constructive trust

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9
Q

What is the difference between a secret trust and a semi-secret trust? Are they enforceable in FL?

A

Secret Trust = the beneficiaries are named and is enforceable in FL.

Semi-Secret Trust = the will provides for a trust but does not specify the beneficiaries. Not enforceable in FL.

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10
Q

In a discretionary trust, the ____________has the discretion to determine how the trust’s assets are distributed to the beneficiaries.

A

trustee

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11
Q

_______________ trusts are set up for the care of pets or animals after the death of the pet’s owner, or for the maintenance of a specific non-charitable property, like a gravesite or a monument.

A

honorary trusts

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12
Q

Establishing a ________ ____________ trust in Florida can provide tax advantages, including potential estate tax savings. By placing a life insurance policy within an irrevocable trust, the proceeds from the policy may be excluded from the insured’s estate for estate tax purposes.

A

life insurance trust

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13
Q

In Florida, _____________ language refers to statements in a will or trust that express a suggestion, desire, or wish of the testator or settlor, but it does not create a legally enforceable obligation.

A

precatory language

Precatory language may include phrases such as “I hope,” “I wish,” or “I desire.”

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14
Q

While precatory language may reflect the testator’s or settlor’s intentions, it is ultimately up to the discretion of the ___________ (or executor) to determine whether to carry out the expressed wishes.

A

trustee

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15
Q

Precatory language _____________ create a binding obligation on the part of the beneficiaries.

A

does not

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16
Q

In a ________ trust, the trustee is obligated to distribute trust assets according to the specific terms set by the grantor

A

mandatory trust

17
Q

In Florida, what happens to a killer’s interest in a trust when the killer is responsible for the death of the trust’s creator?

A

The killer forfeits any interest they may have had in the trust.

(Florida Slayer Statue)

18
Q

The ____________ must be specifically ascertainable , but the ________ does not need to be specifically identified.

A

beneficiary; trustee

19
Q

Which of the following reasons may call for the modification or termination of a trust?
Choose only ONE best answer.

(A) Change in personal circumstances of the trustee.

(B) Change in the financial status of the beneficiary.

(C) Waste of trust assets.

(D) Voluntary transfer of trust assets.

A

(C) Waste of trust assets.

20
Q

When creating an irrevocable trust, what is one potential consequence for the trust maker, or settlor, regarding control over the trust’s property?

A

The settlor loses direct control over the trust’s property.

NOTE = when a trust is established as irrevocable, the trust maker or settlor often relinquishes direct control over the property held within the trust.

NOTE = the settlor may no longer have the ability to reclaim the property or make amendments to the trust.

21
Q

What is the maximum permitted duration of a Florida trust under the amended statutory rule against perpetuities?

A

1000 years

22
Q

T or F

Florida trust laws require that for the creation of a trust, the settlor must be a Florida resident.

23
Q

T or F

Under Florida law, the right to disclaim an interest is barred if the beneficiary is insolvent before the disclaimer becomes effective.