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Fall 24 > Trust 2 > Flashcards

Trust 2 Flashcards

1
Q

statute of uses

A

If the trustee doesn’t have duties/responsibilities no trust, legal title will vest in the beneficiary. If the trustee has a power or duty relating to trust admin the trust stays

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2
Q

Exceptions to SOF

A

Totally oral trust if its only personal property, trustee isn’t settlor or beneficiary, and there’s evidence of trust intent that was mentioned before or at the time of the transfer

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3
Q

Defrauding Creditors

A

UFTA - You can’t transfer property if you’re insolvent

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4
Q

Bad Trust Remedies Creditors and Other

A

Set aside creditor amount OR
Void the trust
1) resulting trust to S (for mistake on S)
2) T gets the property (for bad conduct on S)
3) Remove improper restriction

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5
Q

Prudent Investor Standard Factors

A

PLDC
trust purposes, trust language, distribution requirements, circumstances generally

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6
Q

Trustee Power Sources

A

Instrument, statute, equity, court

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7
Q

Delegation Protections (Still have liability)

A

Agent = affiliate, require arbitration, shorten SoL

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8
Q

S authorization of Breach of Loyalty

A

S can waive self-dealing and conflicts, but construed strictly against T

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9
Q

T Standards for Breach

A

Strictly liable for breach regardless of good faith, fairness, T not benefiting

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10
Q

K Liability TX

A

T can K if within capacity; K plaintiff can recover directly from property

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11
Q

Notice Duty of Plaintiff (K)

A

to B by registered mail within 30 days of filing and at least 31 days before judgement
T has 10 days to get P all B info if asked

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12
Q

Tort Liability, Notice from P

A

P must tell B

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13
Q

How do we know how to allocate? P and I

A

S specific instructions, Trust Code, if neither to principal.
T can have discretion if fair and reasonable - follow the code its always reasonable

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14
Q

Capitol Gains

A

Principal

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15
Q

Interest Earned

A

Income

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16
Q

Rent

A

Income

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17
Q

Eminent Domain/Insurance Proceeds

A

Principal

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18
Q

Cash Dividends

A

Income

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19
Q

Stock Divided

A

Principal

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20
Q

Stock Split

A

Principal

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21
Q

Stock b/c of Merger

A

Principal

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22
Q

T adjustment Power General

A

Allow T to ignore basic rules under certain circumstances; no notice to B in TX

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23
Q

T Adjustment - Factors

A

NPSI
Nature Purpose Settlor intent, ID of Bs

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24
Q

When can’t a T adjust

A

S says no, T=B, T would benefit, adverse tax

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25
T compensation
50/50
26
Accounting Expenses
50/50
27
Ordinary Repairs
Income
28
Capitol Improvements
Principal
29
Debt Payment
Initial - principal, interest - income
30
Insurance premiums
Income
31
Property Tax
Income
32
Depreciation (who pays)
T discretion
33
When does T have to inform B?
When they are going to do something material and unusual
34
When T has to inform B can be limited
Trust revocable, B under 25, B is remote and not eligible for current or end of trust distribution
35
B accounting - how to ask
Written, T has 90 days, can only happen every 12 months
36
Accounting Limitations
Trust is revocable, B isn't able to get current distributions or when trust ends
37
Statute Permission for Deviation
Purposes: fulfilled, impossible, illegal; A change that: S didn't know/couldn't anticipate, Avoids waste/impairment, Achieve S's tax objectives, not inconsistent with S intent - if all B consent Continuing isn't necessary to achieve material purpose of the trust and all Bs consent
38
When TX allows reformation
Prevent Waste, impairment of purposes Achieve trust purposes Correct Scrivener's error - even if unambiguous if there's C and C evidence of S intent
39
Jury trial for reformation and deviation
No
40
S revoking
Presumes they can do whatever unless language says it is irrevocable In writing or by trust
41
T Revoking
S can grant Division/Combo if identical terms Cy Pres Decanting
42
B revoking
Other places have Claflin TX says this can only happen if: Court approval, change isn't against material purpose and all B agree
43
Claflin Rule
B can revoke if no material trust purpose remains unfulfilled
44
S & B Modification/ termination
If S is alive and all B consent
45
7 deadly ends of a trust
Express, S Uneconomical Court Merger No Property left All B dead
46
Uneconomical - End of trust
Discretionary Notice to anyone who is/can get money Value under 50k T says purpose doesn't justify trust going on No adverse tax No conservation Easement
47
Money Damages against T - Lost Value to Trust
No causation and no requirement that T benefited
48
Money Damages against T - Profit made by T
Causation required and no requirement trust had a loss
49
Other Money remedies against T
Lost Profits, Punitive for evil conduct, and any profit made by T even if no breach
50
Remedies against T Removal 4 ways
Discretion for abuse/no fiduciary duty and trust suffered materially T becomes incompetent or insolvent Other Cause
51
Consequences of T Misbehaving
No money SOL removed - usually 4 years Make them carry out trust Injunction More bond Attorney Fees
52
Criminal Remedies for T
For anything above negligence Evil act - even if T doesn't benefit Greater than 300k = life sentence
53
How can a new T be liable for an old one?
Known or should have known Lets bad conduct keep going and doesn't make old T fix it/sue
54
Remedies against B if
Dealt with property wrong Involved in the breach fail to repay trust for loan/over distributing Breach of K by saying they'll give trust their money and not doing it
55
How to prevent remedies
S approves in trust, mandatory arbitration, a valid release, court decree, SoL, Latches
56
What S can't Waive
valid trust restrictions on exculpatory clauses SoL Duty of T to account for B money (current or on end of trust) Good faith Duty to inform Powers of the court In terrorem and good faith
57
SOL for Trust Problem
4 years from discovery
58
Requirement for valid release
18 and competent for past or future conduct can use virtual representation
59
Trust Bank Account
T can add or remove money with no notice No split of title No duties B can only get after T dies if they outlive them
60
Resulting trust fact patterns
Express trust fails Property has nowhere to go Purchase money resulting trust
61
What happens if express trust fails
S has property
62
STEP 1 FOR EXAM
Type of trust
63
STEP 2 FOR EXAM
Validity
64
What to look at for validity
Intent Consideration SoF RAP Purpose Capacity Property T B
65
STEP 3 FOR EXAM
Traits of trust revocable limits on B
66
STEP 4 FOR EXAM
Has trust been changed? parties or court
67
STEP 5 FOR EXAM
Has trust been terminated?
68
STEP 6 FOR EXAM
T conduct
69
What to look at for T conduct
Powers (and did they exceed) Effect of discretion Delegation Prudent Investor Standard Respond to requests Loyalty 3rd Parties Allocation Compensation
70
STEP 7 FOR EXAM
If T acted wrong what remedies?
71
What to look at for remedies against T?
Procedure - standing, venue, jurisdiction, virtual representation Against T - money damages, removal, what you can get
72
More on remedies general
Against B, 3rd parties are remedies barred?
73
STEP 8 FOR EXAM
Are there other trust like relationships? trust bank account resulting trust constructive trust
74
Grounds for constructive trust
Fraud Abuse Promises because of Death Evil Conduct

Fall 24 (4 decks)

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