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Trusts > Requirements for a Trust > Flashcards

Requirements for a Trust Flashcards

1
Q

What 3 types of trust is there?

A
  1. Express Trust
  2. Resulting trusts
  3. Constructive trusts
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2
Q

What are resulting trusts and constructive trusts considered?

A

Equitable remedies

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3
Q

What is an express trust?

A

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

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4
Q

Who has legal title to an express trust?

A

The creator, or Settlor

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5
Q

Who manages the money in the trust?

A

The trustee

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6
Q

Who has equitable title to the distributions of the trust?

A

Remainder beneficiary

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7
Q

What kind of express trusts are there?

A
  1. Lifetime/intervivos-created during life of settlor

2. Testamentary trust-created by settlor’s will

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8
Q

What are the 8 requirements for a valid trust?

A
  1. Settlor who makes a trust
  2. Delivery of legal title
  3. Property to…
  4. Trustee who holds legal title for benefit of…
  5. Beneficiary with…
  6. Intent to create a trust for…
  7. Lawful purposes…
  8. In a validly executed document
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9
Q

Is consideration required to create a trust?

A

NO!

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10
Q

What are the requirements for a settlor of an express trust?

A

Settlor can be anyone 18+ with the capacity to enter into a K

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11
Q

What are the delivery requirements?

A

Assets must be placed out of control of settlor for delivery to be valid (unless settlor is also the trustee!

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12
Q

What are the requirements for the property?

A

Property can be almost anything, but has to be:

  1. property settlor ACTUALLY OWNS, not just mere expectancy of ownership AND
  2. Property has to be identified
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13
Q

T executes a will leaving S her farm. S is happy to get the farm and devises a document naming himself a trustee and his son B as income beneficiaries, with the principal going to his granddaughter M. T approves of this. Is this a valid trust?

A

NO. T is still alive, so S doesn’t own shit yet, can’t devise it therefore.

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14
Q

S created a trust to be funded “with whatever money or property that I may choose to contribute to the trust over the next 10 years” Is this a valid trust?

A

NO. property must be identified in trust.

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15
Q

Who may be a trustee?

A

Anyone who has capacity to acquire or hold title to property for his own benefit can be a trustee. Failure to name a trustee doesn’t matter, can be court appointed.

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16
Q

Who may the beneficiaries be?

A

Beneficiaries must be definite and ascertainable, no ambiguity.

17
Q

What if there is ambiguity as to who the beneficiaries of the trust are?

A

Then the trustee holds in a resulting trust for the residuary beneficiary of a will (or intestate heirs in absence of a valid will)

18
Q

What is the exception to an unidentified beneficiary?

A

If a trust named an unborn descendant of a named individual, it IS considered definite and ascertainable and the trust does NOT fail

19
Q

What are the intent requirements for a valid trust?

A
  1. Settlor must intend to create an enforceable obligation precatory (non binding) language is not enough
  2. Trustee must be given duties to perform, if trustee has no duties then its a passive trust (which is no trust at all!)
20
Q

J gives $250,000 in cash to her oldest daughter M, in trust, with the statement “I would like the trust income to be paid to my youngest son S for life, with the remainder going to Sam’s son C” Is this a trust?

A

NO, the language “would like” is precutory and does NOT impose an enforceable obligation.

21
Q

What must you look for to find intent?

A

ALL of the language and ALL of the facts, not merely for the word “trust”

22
Q

S purchased Whiteacre in 2005, and the deed was made “to S in trust for B” At the time the deed was executed, S and B agreed in writing that B would live on Whiteacre and pay $1000 in rent to S. Is this a valid trust?

A

NO, all facts indicate that S really intended a landlord-tenant relationship with B.

23
Q

What constitutes a lawful purpose?

A

Trust cannot call for:

  1. Commission of a crime
  2. Destruction of property
  3. Have a condition against public policy
24
Q

What types of conditions are against public policy?

A

Total contraints on marriage

Encouraging divorce

25
Q

In his will, J set up a testamentary trust with income going to his wife for life or until she remarries, and upon her death or remarriage to his son C. Is this a valid trust?

A

Yes, because his purpose was to provide for his widow during widowhood.

26
Q

How must a trust be executed for land?

A

Must be in writing and signed by the settlor.

Trusts (5 decks)

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