Testamentary Trusts

Question 1

Testamentary Trusts

Answer 1

Testamentary trusts are created in the settlor’s valid will. Trust intent and the essential terms of the trust (trust res, beneficiaries, and trust purpose) must be ascertained from the will itself, from a writing
incorporated by reference into the will, or from the exercise of a power of appointment created by the will.

Question 2

Secret Trust”—Constructive Trust Imposed

Answer 2

In the case of a secret trust, the settlor agrees with a will beneficiary that the beneficiary will hold the property in trust for someone else—and relies on the beneficiary’s promise—but the will does not state the trust nature of the gift. The intended trust
beneficiary may present extrinsic evidence of the will beneficiary’s promise to hold the property in trust. If the promise can be proven by clear and convincing evidence, a constructive trust will be imposed on the property in favor of the intended trust beneficiary

Question 3

“Semi-Secret Trust”—Resulting Trust Implied

Answer 3

In a semi-secret trust, the will makes a gift in trust but fails to name the beneficiary.