Requirements for a Trust

Question 1

Express Trusts- defined

Answer 1

a legal device that allows an owner of property to make transfers of property and to have those assets managed on behalf of someone else

The person who creates, the settlor, gives legal title to a trustee to manage the money, and the beneficiaries have equitable title to enjoy the distributions from the trust.

Question 2

Express trust- two kinds

Answer 2

(1) lifetime trust (inter vivos trust)- set up during the lifetime of the settlor
(2) testamentary trust- set up in settlor’s will

Question 3

Express trust- Requirements

Answer 3

(1) Settlor who makes a
(2) delivery of legal title to
(3) property (aka res, corpus, or principal) to a
(4) trustee who holds legal title for the benefit of a
(5) beneficiary with
(6) intent to create a trust for
(7) a lawful purpose
(8) in a validly executed document

Question 4

Express trust- settlor

Answer 4

Can be anyone 18 or older, with K capacity

Question 5

Express trust- delivery

Answer 5

titled assets must be FORMALLY TRANSFERED for delivery to be valid

Question 6

Express trust- Property (Res)

Answer 6

property can be almost anything but must be property that the settler owns, not just a mere expectancy of ownership in the future

must be identified property, not subject to future determination

Question 7

Express Trust- Trustee lifetime v. testamentary

Answer 7

-For a lifetime trust, almost anyone can be a trustee since no court involvement is needed for such trusts

• For a testamentary trust created under court supervision, anyone ca except:
• those under 18
• judicially declared incompetents
• convicted felons
• those incapable because of drunkenness, dishonesty, want of understanding, or improvidence

Question 8

Express Trust- non-resident alien serving as trustee

Answer 8

a non-resident alien can serve as trustee ONLY IF:

• that person is related to the decedent, AND
• a new york resident serves as co-fiduciary

Question 9

Express Trust- Failure to name a trustee

Answer 9

Does not make trust invalid

Court can appoint someone

Question 10

Express Trust- Beneficiaries

Answer 10

Must be definite and ascertainable
exception- descriptions in the intestacy statute do not fail (ex- family, next of kin,e etc.)

If ambiguous, the trustee holds a resulting trust for the residuary beneficiary of a will

Question 11

Express Trust- Intent

Answer 11

• settlor must intend to create an enforceable obligation;
• **precatory (non-binding) language is no enough
• Trustee must be given duties to perform; if trustee has no duties to perform it is called a passive trust, which is no trust at all.
• just using the word “trust” does not show intent to create a trust; look at all of the language and all of the facts to determine intent

Question 12

Express Trust- Lawful Purpose

Answer 12

A trust cannot:

• call for commission of a crime
• call for the destruction of property
• have a condition against public policy
• against public policy:
• complete restricting of marriage or promoting divorce
• marriage restrictions to members of certain religion or ethnic groups are valid as permissible partial restraints on marriage

Question 13

Express trust- lawful execution

Answer 13

Must be in writing, signed by the settlor and trustee, AND either (i) acknowledged by a notary public, OR (ii) signed by 2 witnesses