The Requirements of Trust Property (The Res Requirements) Flashcards
What is the requirement of the res?
The corpus, the principal, the subject matter of the trust. In order to have a trust, there must be a specific interest in property to which the trustee’s duties relate, such that the beneficiary who is dissatisfied with the trustee’s performance can say, “You are not doing your job with respect to these assets.” The subject matter of the trust must be certain and identifiable. If there is no certain and identifiable trust property, there is no trust! (From the Hornbook)
A owes B $10,000. In writing, A states: “I hereby declare myself trustee of the debt which I owe to B.” This writing is an attempted self declaration trust, Has A created a valid trust?
No, A has not segregated out any specific interest in property and said this is not what I am holding out in trust
Relationship ends up in the way it began, debtor-creditor relationship
Are “choses” (essentially a right to sue; it is an intangible personal property right recognized and protected by the law, that has no existence apart from the recognition given by the law, and that confers no present possession of a tangible object) in action and accounts receivable interests in “property” sufficient to support a trust even though they are intangible?
Yes - Something or system recognizes as property, patents, royalties, copyrights, stocks
Grandfather tells Uncle that he is leaving Whiteacre (an apartment building) to Uncle in his will. Uncle thereupon records a Declaration of Trust: “I declare myself trustee of my interest in Whiteacre, income to Nephew for life, remainder to his issue.” Valid trust?
NO (expectancy) - Uncle’s claim is NOT a recognized property interest. It is an expectancy. When Grandfather writes the will, Uncle has no claim or property right. Uncle’s expectancy will ripen into a property interest only if (i) Grandfather dies without changing his will and (ii) the will is admitted to probate. Until then, the law views Uncle’s actions as a gratuitous promise to create that trust in the future (there is no consideration involved) Heir Expectant, no one is heir of the living; In order for the trust to come alive after the death of grandfather, Whitacre must be deeded to Uncle and then he can affirmatively re-affirm (this is a rule of the restatement) (in the past while grandpa lived there was no consideration
What is needed to have a valid trust in property to be received in the future?
Consideration -
May a trust fail for want (or lack of) a trustee?
GR: NO - If the intention to create a trust is clearly manifested but no trustee is named, or the named trustee dies or resigns with no provision for a successor trustee, the court will appoint a suitable trustee to execute the trust.
EXCEPTION (rarely used) - If the court finds that the settlor intended for the trust powers to be personal to the trustee, such that the trust should fail if the named person is no longer capable of serving, then the trust would terminate
Ann is the residuary legatee under the valid will of her deceased aunt. Before the taxes and other charges against the estate are known, Ann in writing declares herself trustee of her interest as residuary legatee for the support of her husband and all such children as she should have by him. Thereafter, $1 million is distributed by the executor to Ann as residuary legatee. Valid trust?
Yes - Where the testator has died, although her estate has not been distributed, a legatee has more than a mere expectancy; she has an interest which may be the subject matter of a trust or a gift. This is true even though the amount which the legatee is to receive has not yet been ascertained, as where she is a legatee of the residuary estate; and is certain and identifiable because she is the residuary
F writes trust instrument naming X as trustee and providing that during F’s life, the income, if any, from trust property is to be distributed to F, and at F’s death, the income is to go to Wife for life; remainder to F’s children. F does not transfer any assets into the trust but instead names the trust (i.e. Trustee “as trustee”) as beneficiary under several of his insurance policies. Has a valid trust been created?
Statutes or case decisions in most states provide that an otherwise empty trust is valid if it is named the direct beneficiary of a life insurance policy or a pension plan death benefit.
*In many states, the statute also apples to a trust that is named the direct beneficiary of the settlor’s will.
