revocable trusts, charitable trusts, resulting trusts and constructive trusts, creditors claims, Flashcards
In IL what is the rule for inter-vivos trusts
INTER-VIVOS TRUSTS are IRREVOCABLE and cannot be amended UNLESS the settlor expressly reserves the power to revoke or amend the trust
in IL are inter-vivos trusts presumed irrevocable
YES
does divorce revoke all gifts etc to former spouse
yes
Is a trust void as an attempted testamentary disposition (doesn’t have the requirements of execution of will)
NO.
- no W needed to trust
- needs to be written and signed by T but no W’s required
requirements of a pour over will
1) must be in existence BEFORE or EXECUTED concurrently with a will,
- trust cannot be created after the will is signed
special rules for charitable trusts
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
what are examples of charitable purposes
social benefit, religion, education, relief of poverty, medical research
can a charitable trust name individuals
NO. must be for large segment of public at large
who has the standing to enforce charitable trusts
attorney general
cy pres doctrine
if intent of trust is destroyed, complete, or impossible, court can construe trust to a near as possible factor as original trust
what is an honorary trust
an object is the beneficiary.
ex: car
what is trustee rule for honorary trusts
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
is a trust valid for the benefit of an animal
YES
- but trust terminates on death of animal
are outright bequests to animals ok
NO
- b/c animals cannot hold title to property.
2 situations where resulting trust created
1) where a trust fails for some reason (pay to my best friends)
2) PURCHASE MONEY RESULTING TRUST
what is a purchase money resulting trust
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
2 elements for constructive trusts
no a trust, just equitable remedy
1) WRONGFUL CONDUCT and
2) UNJUST ENRICHMENT
steps for constructive trusts
1) first apply the law: if it will fail then go to 2
2) apply equity:
(A) wrongful conduct and
(B) unjust enrichment
In IL can a person have a self-settled trust to hide assests from creditors
NO
are spenthrift provisions allowed in IL
YES,. protects a trust B’s from creditors from voluntary or involuntary transfer.
- cannot be reached by garnishment or attachment
x/c for spendthrift trusts
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
can creditor get income AFTER a spendthrift trust is paid to B
YES, once the income is distributed, it is no longer subject to trust or clauses
can creditors get irrevocably transferred to 3rd parties?
NO as to settlors creditors b/c does not own anymore.
x/c where settlors creditors can get transfers to 3rd parties
fraudulent transfers: transfer made with intent to defraud, delay or hinder creditors
once again what is the presumption of an inter-vivos trust in IL
presumed IRREVOCABLE and cannot be amended unless the S expressly reserves the power to revoke or amend the trust
Are there any requirements for amending a trust for formalities
No particular formalities are required to amend a trust, even if the amendment affects a disposition under a settlor’s will.
requirements for pour over will
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.
is a pour over will valid even if the trust is amendable
yes.
what is a discretionary trust
where the trustee is given discretion whether to apply or withhold payments to a B
in discretionary trust can a B assign their right to trust before a trustee makes payment
NO, not assignable, creditors cannot reach until trustee makes payments.
support trust
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
does trustee has discretion under a support trust
NO. no discretion to refuse to pay bills necessary for B’s support.
discretionary trust
Trustee is given discretion w/e to apply or withhold payment of trust property to B
can the B interfere with the exercise of Trustee in discretionary trust
NO unless the trustee abuses the power.
when will court interfere with trustee’s discretionary power
ct. will not interfere unless the trustee has acted in bad faith or dishonesty
general rule for a pour over will
the trust must be in existence or must be executed at the time of the will’s execution
x/c for pour over will where trust does not need to be in existence at time of pour over will execution
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
