FOURTH CONCEPT: MISCELLANEOUS TRUSTS Flashcards
What is an honorary trust?
A trust that has no ascertainable beneficiary and confers no substantial benefit upon society.
Why is it called an honorary trust?
The trustee is not required to carry out settlor’s goal, but has the power to carry it out. the trustee is on his honor only to carry out settlor’s intent.
“A trust to further fox hunting.” What kind of trust is this an example of?
An honorary trust.
A trust to advance an unusual political ideology. What is this trust an example of?
An honorary trust
If a trustee in an honorary trust refuses to carry out settlor’s wishes, what happens to the trust?
The trust fails, and we have resulting trust in favor of the settlor, or, if she is dead, to settlor’s estate.
What happens in a private express trust or a charitable trust when the trustee refuses to serve?
The court appoints a new trustee.
How does the RAP apply to honorary trusts?
Almost all honorary trusts violate the RAP. In some states the honorary trust is striken at inception, in others the court will allow the trust to endure for 21 years and att eh end the resulting trust willl go back to the settlor or his estate.
What is a Totten trust?
the named beneficiary takes whatever is left in the account at death of the owner of the account. (this is not a true trust)
Who owns the the totten trust bank account during the settlor’s life time?
The settlor.
Does a settlor owe any fiduciary duties to the beneficiary in a Totten trust?
No.
if Mary Smith opens up a totten trust and then tells John Jones, “I have created this trust for you,” is it still a totten trust?
Mary has manifested an intent to create a trust and elevated this lowly Totten account to a full-blown private express trust, with the full range of fiduciary duties.
