MC Mix Flashcards
Can a debtor hold her own debt in trust?
No
Can a creditor hold the debt of another in trust?
Yes
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.
Cannot - the trust res must be property that the settlor currently has the right to convey
Who is the authority to remove a trustee for breach of trust or unfitness?
The courts
Do beneficiaries have the right to unilaterally remove the trustee?
Generally not unless such a power is granted to them by the trust instrument
True or False: Totten trusts are revocable by withdrawal.
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.
Can a totten trust be revoked by a provision in a will that only makes a general reference to bank accounts?
No - to be revoked via a will, the particular account must be particularly identified.
What occurs if the beneficiary of a totten trust predeceases the depositor?
The trust automatically terminates and the funds belong to depositor outright.
The anti-lapse statute does not apply to the totten trust.
What is required for a court to modify the terms of a trust?
1) Change in circumstances
2) Compliance with the trust as written would defeat or substantially impair a material purpose of the trust
Does a violation in the statute of will prevent the enforcement of a constructive trust?
No - the goal of a constructive trust is to prevent unjust enrichment.
When a trustee commits a breach of trust, what can the beneficiaries recover?
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.
If the beneficiary under a totten trust dies before the depositer what happens to the funds?
Goes to the depositer or its estate automatically.
If a problem states “T devises specifically described RE to his brother” with instructions about the beneficiaries, is this enough to form a trust?
Yes
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?
The beneficiary
Does a semi-secret trust fail if there is no identified beneficiary?
Yes - a resulting trust will emerge for T’s estate or heirs.
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?
No
True or False: A trust is revocable by Settlor unless the terms expressly state that it is irrevocable.
True
Even if the trust says its irrevocable, a spend thrift trust can be terminated by the Settlor if…
All beneficiaries consent.
True or False: If a Settlor dies A and B can there after terminate a spend thirft trust.
False
Under the Uniform Transfer to Minor Act, does the Act avoid the need to appoint a guardian for the minor?
Yes
Under the Uniform Transfer to Minor Act, does the Act permit gifts of any type of property except real estate?
No - the Act permits the gifting of any property including real estate.
Under the Uniform Transfer to Minor Act, does the Act provide a 14k annual exclusion under the federal gift tax?
Yes
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?
Yes
True or False: A trustee may refuse appointment arbitrarily.
True
