revocable trusts, charitable trusts, resulting trusts and constructive trusts, creditors claims,

Question 1

In IL what is the rule for inter-vivos trusts

Answer 1

INTER-VIVOS TRUSTS are IRREVOCABLE and cannot be amended UNLESS the settlor expressly reserves the power to revoke or amend the trust

Question 2

in IL are inter-vivos trusts presumed irrevocable

Answer 2

YES

Question 3

does divorce revoke all gifts etc to former spouse

Answer 3

yes

Question 4

Is a trust void as an attempted testamentary disposition (doesn’t have the requirements of execution of will)

Answer 4

NO.

• no W needed to trust
• needs to be written and signed by T but no W’s required

Question 5

requirements of a pour over will

Answer 5

1) must be in existence BEFORE or EXECUTED concurrently with a will,
- trust cannot be created after the will is signed

Question 6

special rules for charitable trusts

Answer 6

1) not subject to RAP
2) must be for charitable purpose
3) in favor of reasonably large segment of public at large
4) cy pres doctrine

Question 7

what are examples of charitable purposes

Answer 7

social benefit, religion, education, relief of poverty, medical research

Question 8

can a charitable trust name individuals

Answer 8

NO. must be for large segment of public at large

Question 9

who has the standing to enforce charitable trusts

Answer 9

attorney general

Question 10

cy pres doctrine

Answer 10

if intent of trust is destroyed, complete, or impossible, court can construe trust to a near as possible factor as original trust

Question 11

what is an honorary trust

Answer 11

an object is the beneficiary.

ex: car

Question 12

what is trustee rule for honorary trusts

Answer 12

trustee ON HER HONOR in deciding w/e to perform the trust

• gift is valid only in the sense that it will be upheld if chose to perform.
• If gift fails, resulting trust

Question 13

is a trust valid for the benefit of an animal

Answer 13

YES

- but trust terminates on death of animal

Question 14

are outright bequests to animals ok

Answer 14

NO

- b/c animals cannot hold title to property.

Question 15

2 situations where resulting trust created

Answer 15

1) where a trust fails for some reason (pay to my best friends)
2) PURCHASE MONEY RESULTING TRUST

Question 16

what is a purchase money resulting trust

Answer 16

A pays purchase price of land, and causes the title to be taken in B’s name. A and B are not related.

• Presumption: if not related
  1) gift or
  2) loan of purchase price
• if related: PRESUMED GIFT

Question 17

2 elements for constructive trusts

Answer 17

no a trust, just equitable remedy

1) WRONGFUL CONDUCT and
2) UNJUST ENRICHMENT

Question 18

steps for constructive trusts

Answer 18

1) first apply the law: if it will fail then go to 2
2) apply equity:
(A) wrongful conduct and
(B) unjust enrichment

Question 19

In IL can a person have a self-settled trust to hide assests from creditors

Answer 19

NO

Question 20

are spenthrift provisions allowed in IL

Answer 20

YES,. protects a trust B’s from creditors from voluntary or involuntary transfer.
- cannot be reached by garnishment or attachment

Question 21

x/c for spendthrift trusts

Answer 21

1) contracts for necessities: medical, food, rent
2) child support ARRERAGES (not future child support)
3) any interest retained by settlor
4) federal tax liens

Question 22

can creditor get income AFTER a spendthrift trust is paid to B

Answer 22

YES, once the income is distributed, it is no longer subject to trust or clauses

Question 23

can creditors get irrevocably transferred to 3rd parties?

Answer 23

NO as to settlors creditors b/c does not own anymore.

Question 24

x/c where settlors creditors can get transfers to 3rd parties

Answer 24

fraudulent transfers: transfer made with intent to defraud, delay or hinder creditors

Question 25

once again what is the presumption of an inter-vivos trust in IL

Answer 25

presumed IRREVOCABLE and cannot be amended unless the S expressly reserves the power to revoke or amend the trust

Question 26

Are there any requirements for amending a trust for formalities

Answer 26

No particular formalities are required to amend a trust, even if the amendment affects a disposition under a settlor’s will.

Question 27

requirements for pour over will

Answer 27

1) a trust must be evidenced by an instrument that was in existence when the will was created and (must be in existence at time of will)
2) identified in the will.

Question 28

is a pour over will valid even if the trust is amendable

Answer 28

yes.

Question 29

what is a discretionary trust

Answer 29

where the trustee is given discretion whether to apply or withhold payments to a B

Question 30

in discretionary trust can a B assign their right to trust before a trustee makes payment

Answer 30

NO, not assignable, creditors cannot reach until trustee makes payments.

Question 31

support trust

Answer 31

a trust where the trustee is REQUIRED to pay or apply as much of the trust is as necessary for the support of the B

Question 32

does trustee has discretion under a support trust

Answer 32

NO. no discretion to refuse to pay bills necessary for B’s support.

Question 33

discretionary trust

Answer 33

Trustee is given discretion w/e to apply or withhold payment of trust property to B

Question 34

can the B interfere with the exercise of Trustee in discretionary trust

Answer 34

NO unless the trustee abuses the power.

Question 35

when will court interfere with trustee’s discretionary power

Answer 35

ct. will not interfere unless the trustee has acted in bad faith or dishonesty

Question 36

general rule for a pour over will

Answer 36

the trust must be in existence or must be executed at the time of the will’s execution

Question 37

x/c for pour over will where trust does not need to be in existence at time of pour over will execution

Answer 37

a will may devise property to a trustee of a trust established or to be established DURING THE TESTATORS LIFE.
- the trust may be established AFTER the will is executed BUT BEFORE THE TESTATORS DEATH