Mixed Flashcards
Claflin Doctrine
A trustee can block a premature trust termination—even one to which all of the beneficiaries have consented—if the trust is shown to have an unfulfilled material purpose. Most courts allow the trustee to block the termination if it can be shown that termination would violate the settlor’s intent.
When may a trust terminate by consent?
A trust may terminate by consent if the settlor is deceased or has no remaining interest in the trust, and if all of the beneficiaries and the trustee consent to the termination.
A class remains open and may admit new members until:
(i) at least one class member is entitled to obtain possession of the gift, or (ii) the named person dies.
Under the UPAIA, how may a trustee characterize trust income or principal?
trustee is empowered to re-characterize items and reallocate investment returns as he deems necessary to fulfill the trust purposes, as long as his allocations are reasonable and are in keeping with the trust instrument.
How is a distribution of stock characterized under the UPAIA?
A distribution of principal
What is the traditional approach to characterizing trust income or principal?
The traditional approach assumed that any money generated by trust property was income and that any money generated in connection with a conveyance of trust property was principal. The traditional approach serves as the starting point for the modern approach
What future interests can a grantor hold?
- reversion
- possibility of reverter
- right of entry
What future interests can a beneficiary hold?
- remainder
- executory interest
Reversion
right held by grantor when grantee’s life estate ends
Right of Entry
Grantor’s right after fee simple subject to condition subsequent.
Possibility of Reverter
- Grantor’s right after fee simple determinable estate
Vested Remainder
- ascertainable future holder
- no express condition precedent prior to vesting
Executory Interest
Someone other than a grantor holds an interest that is followed by:
1) Vested Remainder subject to divestment
2) Fee simple subject to expecatory limitation.
