Trust Administration Flashcards
Where there is a promise to leave one’s property to another in trust via one’s will, what is created in the person expecting the property?
An expectancy. The one making the promise has made a gratuitous promise to create a trust in the future.
What does it mean that a promise to create a trust was gratuitous?
It was unsupported by consideration.
Where a promise to create a trust is gratuitous, a trust arises when all elements of a valid trust have been met if, but only if, at the subsequent time the sellor does what?
Manifests an intention to create the trust.
Where a testator has died, but their property has not been distributed, and the amount which the legatee would receive is unacertained, does the legatee have an interest in the property?
Yes.
An otherwise empty trust is valid if what?
It is named the direct beneficiary if a life insurance policy, pension plan death benefit, or is named as a direct beneficiary in a testator’s will.
Power of Appointment —
where a testator leaves property to another for the purpose of distributing the property as she sees fit. In effect, it is leaving the property to a ~trustee who has complete discretion about how the property is distributed. These are created where a trust has no definite beneficiaries.
If the one to whom property is left in a power of appointment fails to distribute the property?
The property will return to the estate of the deceased via a resulting trust.
Must a trust’s beneficiaries be alive when the trust is created?
No, just need to be identified.
Where a trust has no one designated to enforce it, what result?
The court will designate an enforcer of the trust.
A sole trustee cannot be the sole ____________.
beneficiary.
Where there are two trustees, and one of the trustees is the sole beneficiary to the trust, is there a problem?
No. While a sole trustee cannot be the sole beneficiary, where there is more than one trustee, one of the trustees can be the sole beneficiary.
Where there is one trustee, and the trustee is a co-beneficiary with another person, is there a problem?
No. While a sole trustee cannot be the sole beneficiary, where there is more than one beneficiary, the trustee can be a beneficiary so long as there is more than one beneficiary.
Under a Totten Trust, can the depositor make withdrawals from the account during the depositor’s lifetime despite the account being in trust for another?
Yes. A Totten Trust is revocable in whole or in part during the life of the testator/depositor. The depositor may make withdrawals from the account during their life and still have the remaining amount in trust for the person named as the beneficiary. At death of the testator, the beneficiary is entitled to the balance.
Can more than one trust be combined into single trust?
Yes, so long as the Bs are given notice.
Can a trust be split into several different trusts?
Yes, so long as the Bs have notice.
What types of powers does a trustee have the power to exercise under a trust?
Express and implied powers
Co-trustees who are unable to reach a unanimous decision may act by _____________ decision.
majority
What is an imperative power?
A power which the trust requires the trustee to perform.
What is a discretionary power?
A power which the trust gives the trustee the freedom to perform or not perform. A decision not to exercise a discretionary power is subject to judicial review for abuse of discretion.
To whom does a trustee of a revocable trust owe her duties?
The settlor of the trust, not the beneficiary.
To whom does a trustee of an irrevocable trust owe her duties?
The beneficiary.
The trustee has a duty to personally administer the trust in ______________ and in a ______________ manner.
good faith; prudent manner
