Trust overview

Question 1

Settlor/grantor/trustor

Answer 1

Creator of Trust

Question 2

Trustee

Answer 2

Person who holds legal title to the trust property and manages it for the beneficiaries

Question 3

Beneficiary

Answer 3

Person who holds equitable title to trust property and to whom TT owes the fiduciary duties

Question 4

T. Instrument

Answer 4

document that embodies the Trust’s terms

Question 5

Res/corpus

Answer 5

the property that is held in trust for the beneficiary.

Question 6

Methods of creating trusts

Answer 6

Testamentary or intervivos (either by deed of trust or declaration of trust)

Question 7

Deed of trust

Answer 7

mechanism to create the trust inter vivos
Settlor transfers propert to another person as TT;
There must be deliver to TT

Question 8

Declaration of trust

Answer 8

the Settlor declared that he holds certain property in trusts (names himself as TT).

Question 9

If there’s no trustee

Answer 9

under common law a trust will not fail for want of a trustee. but trustee must accept office and have active duty. Otherwise courts will assign trustee

Question 10

Creation of trust under the UTC

Answer 10

Trust is created only if:

• > Settlor has capacity (same capacity as in wills, higher than getting married drunk in vegas, less than K) to create a Trust;
• > Settlor indicates an intention to create the Trust;
• ->Trust has a definite beneficiary or is:
• ———» a charitable Trust,
• ———» Trust for care of an animal (Toby will be Safe!) (UTC §408), or
• ———» Trust for a noncharitable purpose (UTC §409);
• > Trustee has duties to perform; and
• > Same person is not the sole TT and sole beneficiary.

Question 11

Precatory language

Answer 11

language that expresses a moral obligation is not sufficient to create a trust.

Question 12

Language needed for trust

Answer 12

No specific language to create trust, but do need to show
settlor’s intention to create a Trust relationship; and possibly make it clear that one person holds title as trustee

ex. Jiminex case the words, “shall be maintained for the benefit and not be sold” =trust.

Question 13

Equitable charge

Answer 13

language that creates a security interest in property, is not a trust, This will be signaled by a lack of a fiduciary relationship

Question 14

Failed gift

Answer 14

Also not trusts. see Hebrew university case, tried to construe this as a trust but it didn’t work

Question 15

Trust creation need to be in writing?

Answer 15

under UTC 402, no. However most States require writing.

Question 16

Necessity of Trust Property (“Res”)

Answer 16

Future profits dont constitute a property interest for trusts purposes. Need some kind of tangible property for creation of trust.

Question 17

4 ways to distinguish Trusts from Debts

Answer 17

1) . Trust beneficiary has equitable interest property; creditor generally has no interest in specific property
2) . Trust beneficiary receives increase/decrease in value of Trust property; if debt, amount owed remains constant
3) .If Trust, creditors of TT can’t reach Trust property
4) . Statute of limitations differences

Question 18

Resulting Trust

Answer 18

equitable reversionary interest that arises when by operation go law either
1). an express trust fails
2). when there is a purchase money resulting trust—>consideration for purchase of property is paid by one person, but title is taken in name of another who is not natural object of purchaser’s bounty
○ In both situations – transferee not entitled to beneficial interest, so interest is said “to result” (revert) to transferor or transferor’s estate

Question 19

Constructive trust

Answer 19

○ Equitable remedy in circumstances in which fraud, mistake, duress, &/or unjust enrichment have occurred
—->§ By operation of law, the wrongdoer never owned the property gained through malfeasance. But if the will is changed and cant ascertain the true owner, intestacy
○ Simply moves title from person with title (unjustly) to someone who should have title

Question 20

Revocable Inter vivos Trusts

Answer 20

• > fiduciary relationship b/w fiduc. and benef.
• > need 1 or mor ascertainable beneficiaries (“friends” not a specific class–Clark case).
• -> formed by a declaration of trust or deed of trust

Question 21

Revocable v. Irrevocable intervivos Trust

Answer 21

UTC 602(a) presumes inter-vivos trusts are revocable unless declared to be irrevocable. This is also the majority view.

Question 22

How to revoke a revocable trust

Answer 22

1) follow instructions proscribed by trust itself.
2) . if not method dicta bled above, by a later will or codicil, or any other method manifesting intent to revoke…. (so maybe you could pee on this too).

Question 23

Private trust

Answer 23

Trust must be for benefit of its beneficiary(ies); need not be ascertained at Trust creation

Question 24

Charitable trust

Answer 24

no ascertainable beneficiary required; must be for the benefit of the general public

Question 25

Trusts for Pets & Other Noncharitable Purposes

Answer 25

So you can’t will to Toby bc he’s not a person and can’t have property rights, however, can make bequest to a human TT to use $ for the benefit of him.
See also: Common law Honorary Trusts and Statutory Trusts

Question 26

Common Law Honorary Trust

Answer 26

transferee under no legal oblig. (only “honor”) to carry out settlor’s stated purpose to care for S’s pet animal; if transferee declines or neglects to do so, resulting trust arises in favor of T’s residuary/kin
EX. § Bequeathed to his dog allowable bc testator was willing. UTC 408 and 409 details pet stuff.

Question 27

Common Law Statutory Trusts

Answer 27

Statutory purpose trust: permits trusts for a pet animal or other non-charitable purposes (preserve grave site, monument)