Trust Validity Flashcards
Elements of Private Trust
- Settlor w/capacity
- Present intent to create a trust
- Trustee
- Definite beneficiaries (same person can’t be beneficiary & trustee)
- Trust prop
- Valid trust purpose
Why law governs trusts?
UTC (Uniform Trust Code)
What mental state must the settlor have?
Capacity
What mental state must the trustee have?
Competent
Formal words or writing required to create a trust?
No unless SOF or statute
Does a beneficiary need a specific mental state?
No
Does the beneficiary have to accept the trust?
Yes but doesn’t need to know about it until it comes to fruition
Effect of divorce
Beneficiary spouse and relatives considered “dead”
Class gifts (common law vs. UTC)
CL- beneficiaries need to be reasonably definite
UTC- beneficiaries can be indefinite class
What happens if trust fails?
Goes back to settlor or if dead, to successors
What happens if trustee dies?
Trust continues and new trustee take place
Acceptance by trustee
1) signed
2) substantially comply with acceptance terms
3) accept delivery of prop, is pwr, or say accepting
Why would a court remove a trustee?
Breach of trust
Not cooperating
Unfit
Unwilling
Substantial change in circumstance
Can a trustee resign after accepting?
Yes but must
(1) give notice to settlor, beneficiaries, and co-trustees
(2) get court approval
