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Bar Exam > Trusts > Flashcards

Trusts Flashcards

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1
Q

Duties of Trustee

A
  1. Impartiality
    • Creates principal/income problem
  2. Loyalty & good faith
  3. Segregate funds
  4. Prudence (sound investing)
  5. Disclose/Account for trust assets
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2
Q

Constructive Trusts

A

*prevents unjust enrichment in the event of some unlawful conduct

  1. Confidential/Fiduciary Relationship
  2. Promise
  3. Transfer of property in reliance on that promise
  4. Resulting unjust enrichment
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2
Q

Termination w/o consent

A
  • When purpose has been accomplished
  • Cannot be terminated if material purpose remains
    • spendthrift trust has material purpose of asset protection
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3
Q

Remedial Trusts

A
  1. Honorary (failed charitable purpose)
  2. Resulting (failed trust)
  3. Constructive
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3
Q

Spendthrift Trusts

A

NY presumptively assumed spendthrift trusts.

  • expressly restricts the beneficiary’s power to voluntarily or involuntarily transfer his equitable interest

Exceptions:

  • Children/spouses seeking family support
  • People providing necessities
  • Government
  • Income beyond that needed to provide beneficiary according to his station in life
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4
Q

Cy Pres

A

Allows terms of charitable trust to be modified if illegal, impossible or impracticable

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5
Q

Support Trust

A

Trustee must pay out in accordance w/ some pre-specified objective standard

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5
Q

Creditor access to trust property

A
  • Mandatory –> only mandatory payments
  • Discretoinary –> can’t access trust property
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6
Q

Removing trustee

A
  1. incapacity
  2. breach
  3. conflict of interest (not apparent at time of creation)
  4. serious disagreement
  5. poor performance
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8
Q

Saving statute

A

creates a presumption that grantor intended to require that a condition be met w/n perpetuities period

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9
Q

Trusts

A

Dividing legal and equitable title to the property.

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10
Q

Intent

A

No special language

  • just intent to separate equitable interest
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11
Q

No Further Inquiry Rule

A

A self-dealing trustee is auto liable

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12
Q

Suspension statute

A

prevents fragmentation of an estate beyond perpetuities period – requires that some combinition of people be able to convey a FSA w/n perpetuities period

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13
Q

Express Trust Requirements

A
  1. Intent
  2. Trust Property
  3. Valid trust purpose
  4. Beneficiaries
  5. In writing

Lifetime trust:

  • writing
  • signed by settlor and trustee
  • notarized or executed in presence of 2 Ws + signed
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14
Q

Legit charitable purposes

A
  1. Relief of poverty
  2. Advance education/religion
  3. Promotion of good health
  4. Gov purposes
  5. Other purposes benefitting community at large or particular segments of community

GHOPE

Gov,

Health,

Other

Povertu.

Education/religion

15
Q

Terminating Trust

A
  • Revocable trust –> pursuant to terms of trust
  • Irrevocable trust –> via settlor and beneficiary agreement
16
Q

Discretionary Trust

A

Discretion as to how much trustee pays out

  • beneficiary has no claim but trustee cannot abuse discretion
17
Q

Trust purpose

A

Any purpose so long as not illegal or against public policy

18
Q

Trust formation (interests)

A

Require separation of agreement. Even a contingent remainder beneficiary suffices –

O puts property in trust for O for life w/ O as trustee, remainder to O’s kids

20
Q

NY Trust Presumption

A

Presumption of irrevocability and non-amendability

22
Q

Trust beneficiaries

A

Must be ascertained at time they will TAKE not at time of will’s creation

23
Q

Pet trusts

A

OK but expire after 21 years

24
Q

Pour Over trusts

A

Created inter vivos but funded at death

25
Q

Mandatory Trust

A

Trustee must pay out pre-specified money

26
Q

Methods of making of trusts

A
  1. Inter Vivos
  2. Testamentary
27
Q

RAP

A

Requires that all equitable interests in a trust become certain w/n the prepetuities period

(21 years w/n the death of a life in being at the time of conveyance)

28
Q

Modification of Trust

A

If an unanticipated change in conditions frustrates the terms or purpose of trust

29
Q

Totten Trusts

A

joint bank account in which the depositor deposits money in trust for a beneficiary

Depositor:

  • retains control
  • can use money for own benefit
  • can revoke at any time
30
Q

Charitable Trusts

A
  1. RAP doesn’t apply
  2. Charitable purpose supplants “beneficiary”

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