MC Mix

Question 1

Can a debtor hold her own debt in trust?

Answer 1

No

Question 2

Can a creditor hold the debt of another in trust?

Answer 2

Yes

Question 3

Property that the settlor expects to own in the future but has no present right to transfer _____ be the subject matter of a present trust.

Answer 3

Cannot - the trust res must be property that the settlor currently has the right to convey

Question 4

Who is the authority to remove a trustee for breach of trust or unfitness?

Answer 4

The courts

Question 5

Do beneficiaries have the right to unilaterally remove the trustee?

Answer 5

Generally not unless such a power is granted to them by the trust instrument

Question 6

True or False: Totten trusts are revocable by withdrawal.

Answer 6

True - the depositor has the right to withdraw from the account during their life time. The beneficiary only has a right to the then remaining balance.

Question 7

Can a totten trust be revoked by a provision in a will that only makes a general reference to bank accounts?

Answer 7

No - to be revoked via a will, the particular account must be particularly identified.

Question 8

What occurs if the beneficiary of a totten trust predeceases the depositor?

Answer 8

The trust automatically terminates and the funds belong to depositor outright.

The anti-lapse statute does not apply to the totten trust.

Question 9

What is required for a court to modify the terms of a trust?

Answer 9

1) Change in circumstances

2) Compliance with the trust as written would defeat or substantially impair a material purpose of the trust

Question 10

Does a violation in the statute of will prevent the enforcement of a constructive trust?

Answer 10

No - the goal of a constructive trust is to prevent unjust enrichment.

Question 11

When a trustee commits a breach of trust, what can the beneficiaries recover?

Answer 11

Damages for the resulting loss - look at all related costs and losses.

i.e. in a stock, the increased cost of now purchasing stock and lost profits.

Question 12

If the beneficiary under a totten trust dies before the depositer what happens to the funds?

Answer 12

Goes to the depositer or its estate automatically.

Question 13

If a problem states “T devises specifically described RE to his brother” with instructions about the beneficiaries, is this enough to form a trust?

Answer 13

Yes

Question 14

If a secret trust is formed with the beneficiary to be identified in another writing, will the court hold a constructive trust for the beneficiary or the testator’s estate?

Answer 14

The beneficiary

Question 15

Does a semi-secret trust fail if there is no identified beneficiary?

Answer 15

Yes - a resulting trust will emerge for T’s estate or heirs.

Question 16

Is there any liability if trustee joined in an act that constitutes breach as decided by the rest of the trustee if it objected in writing?

Answer 16

No

Question 17

True or False: A trust is revocable by Settlor unless the terms expressly state that it is irrevocable.

Answer 17

True

Question 18

Even if the trust says its irrevocable, a spend thrift trust can be terminated by the Settlor if…

Answer 18

All beneficiaries consent.

Question 19

True or False: If a Settlor dies A and B can there after terminate a spend thirft trust.

Answer 19

False

Question 20

Under the Uniform Transfer to Minor Act, does the Act avoid the need to appoint a guardian for the minor?

Answer 20

Yes

Question 21

Under the Uniform Transfer to Minor Act, does the Act permit gifts of any type of property except real estate?

Answer 21

No - the Act permits the gifting of any property including real estate.

Question 22

Under the Uniform Transfer to Minor Act, does the Act provide a 14k annual exclusion under the federal gift tax?

Answer 22

Yes

Question 23

Under the Uniform Transfer to Minor Act, does the Act automatically give the custodian the power to pay minor’s benefits as is advisable for minor’s support and education?

Answer 23

Yes

Question 24

True or False: A trustee may refuse appointment arbitrarily.

Answer 24

True

Question 25

True or False: A trustee can accept a trust in part and declaim it in part.

Answer 25

False - all or nothing

Question 26

What does an exculpatory clause of a trustee not protect against?

Answer 26

1) Bad Faith
2) Intentional Breach of Trust
3) Reckless indifference to the purposes of the trust.

Question 27

Can a trustee offset liability of a breach from the gain of another breach?

Answer 27

No they would be personally liable for the full extent of the loss and cannot offset

Question 28

Is an intervivos trust valid if the Settlor retains the power to control the trustee in administering the trust?

Answer 28

Yes

Question 29

Is an intervivos trust valid if the Settlor retains the power to revoke the trust?

Answer 29

Yes

Question 30

True or False: An intervivos trust is valid even if the settlor retains the power to modify the trust instrument.

Answer 30

True

Question 31

True or False: An intervivos trust is not valid if the settlor retains the power to add or withdraw from the trust.

Answer 31

False

Question 32

When considering whether to chose a constructive or resulting trust, what is the one factor that tips in favor of a constructive trust?

Answer 32

Unjust Enrichment

Question 33

True or False: If a promise to create a trust in the future is supported by consideration, the trust can arise in the future when the property is acquired without any future manifestation of intent.

Answer 33

True

Question 34

A pour over gift from a will to an inter vivos trust is not valid unless the trust was executed ____ or _____ with the will

Answer 34

Prior to or contemporaneously with

Question 35

True or False: Settlor-Beneficiary can transfer its interest and it can be reached by present or future creditors.

Answer 35

True

Question 36

True or False: Settlor-Beneficiary can transfer its interest under spend thrift clause and it cannot be reached by present and future creditors.

Answer 36

False

Question 37

A _______ trust is subject to the claims of the Settlor’s creditors during the Settlor’s lifetime.

Answer 37

Revocable

Question 38

What type of trust is formed is made for the purpose of caring for any public or private burying ground, churchyard, or other place for burial?

Answer 38

Charitable - not subject to RAP

Question 39

What is required of an inter vivos trust relating to real property?

Answer 39

It must be evidenced by a deed conveying title to the trustee.

Question 40

How can a trust instrument = a conveyance

Answer 40

Signed by Settlor
Signed by 2 witnesses
Legal description
Contain words of conveyance “grant” “bargained” “sold”

Question 41

The testamentary aspect of an intervivos trust are ___ unless the trust is _____.

Answer 41

Invalid

executed with the formalities of a will.

Question 42

A pour over gift from a will to an intervivos trust is not valid unless

Answer 42

trust was executed before or contemp with the will

Question 43

True or False: If supported by consideration, a trust can raise in the future when the property is acquired without further intent

Answer 43

True