Oral TR: Irrevocable Intervivos TR Flashcards
Are irrevocable oral trust of personalty enforcable?
Yes
Are irrevocable oral trusts of real property enforceable?
No - trust with land must be evidenced by a writing that satisfies SOF
X promised M that he would provide a home for her and her son if M would keep house. In from of S, X handed a deed to S and stated that S would hold the property in an irrevocable trust for M until her death and then convey to her son as consideration for services rendered.
What is the result?
Express Trust: No - trust with land requires a writing.
Constructive Trust- Can be established if either:
(i) Fraud in the inducement because trustee promised to serve as the trustee; or (ii) confidential relationship between grantor and grantee.
If Trust fails, the trustee keeps the property. M can sue under Quantum Meruit to get the value of the services rendered.
What are the two grounds for a court to grant a Constructive Trust?
1) Fraud in the Inducement: If at the time the property is given to trustee, he orally promised to serve as trustee but had no actual intention to follow through.
2) Confidential Relationship: There is a confidential relationship between grantor and grantee.
Concern of one using a confidential relationship to enrich themselves (husband/wife; priest-parishioner)
Trustee must have agreed to hold the property in trust.
What happens if a constructive trust fails?
The trustee keeps the property outright. The party claiming to be the beneficiary could bring a claim for quantum meruit for unjust enrichment.
Requirements for Oral Promise (supported by consideration) to make devise in a will
Contracts for land or personal property have to be manifested in writing with 2 witnesses.
If nothing is in writing, quantum meruit is the only option.
If it is in writing, suit can be brought for breach of contract for which the remedy is a constructive trust and court will order the property transferred to the rightful owner.
What is a Secret Trust?
Absolute devise by will with oral promise to hold in trust.
X dies leaving a will devising Acre to J. X’s niece claims that X told J that J was to hold the property in trust for her benefit and that J agreed to serve as trustee. Can this promise be enforced?
Yes - testimony can be introduced.
Burden: Clear, satisfactory, and convincing evidence more than a mere preponderance.
Result: Constructive trust can be implied for her benefit.
What is the reason for the imposition of a constructive trust?
To prevent unjust enrichment.
Viewed that unjust enrichment in violation of the promise outweighs the statute of frauds.
What if a settlor never tells a party about their desire for that party to serve as trustee. If at their death, there is a signed note stating this, is the party bound?
No because there was no agreement between the parties for the second party to serve as trustee.
What is a Semi-Secret Trust?
Devise in trust with an oral agreement as to who the beneficiaries are.
Are Semi-Secret Trusts valid in FL?
The grant ends up as a resulting trust.
This involves no wrongdoing so to impress the trust for the beneficiaries would violate the SOF that the beneficiaries be indentified. The trustee cannot even voluntarily comply.
