Lesson 7

Question 1

Six Elements to a Valid Trust

Answer 1

(1) valid intent to create a trust,
(2) a trustee,
(3) a beneficiary,
(4) trust property,
(5) delivery of that property, and
(6) a lawful purpose

Question 2

Trust

Answer 2

A trust is a fiducary relationship with respect to specific property, to which the trustee holds the legal title for
the benefit of one or more persons, who hold equitable title as beneficiaries

Question 3

Settlor

Answer 3

The settlor (sometimes called the “trustor,” “donor,” “transferor,” or “grantor”) is the person who creates the trust—i.e., who intentionally causes it to come into existence by will or by inter vivos transfer (or declaration)

Question 4

Trustee

Answer 4

The trustee is the person or entity (often a bank or other corporation) who holds legal title to the trust property.

Question 5

Trust Property

Answer 5

The trust property (the subject matter or res) is the interest the trustee holds for the beneficiaries

Question 6

Beneficiary

Answer 6

A beneficiary (cestui que trust or simply “cestui”) is a person for whose benefit the trust property is held by the trustee

Question 7

Res of a Trust

Answer 7

There are three generally stated requirements for the trust subject matter or res: It must be

(i) an existing interest in property;
(ii) capable of ownership and alienation; and
(iii) sufficiently identifiable and identified

Question 8

Inter Vivos Trust

Answer 8

An inter vivos trust is a trust which is created by the owner of property during his or her lifetime

Question 9

Testamentary Trust

Answer 9

A testamentary trust is a trust which is created by the will of the decedent and becomes effective upon the death of a testator