Parties to a Trust Flashcards
What is a trust?
A management device for holding and managing property with a bifurcated transfer.
For whom does the trustee manage the property?
For the beneficiary
What is the principal?
The original trust property and any increase in value
What is the income?
Investment returns on principal
Who is the person who creates the trust?
The settlor.
Is a trust presumed revocable or irrevocable?
A trust is presumed irrevocable unless the trust document states otherwise.
What is a mandatory trust?
A trust from which the trustee must make distributions.
What is a discretionary trust?
A trust from which the trustee may make distributions
What is a Remedial Trust?
An equitable remedy created by operation of law from which the trustee may only transfer property.
Does RAP apply to trusts?
Yes. Common law approach is to invalidate immediately while the wait and see approach waits for it to develop.
Who holds title to the property in a trust?
Trustee
What happens if there is no trustee?
A court or a majority of income beneficiaries will appoint.
What are the rights of the trust’s beneficiary?
- hold equitable title
- enforce the trust instrument
Can the trustee be a beneficiary?
Yes, but not the sole beneficiary.
Is a pet trust valid?
IN a majority of jurisdictions, no.
