Trusts

Question 1

what are the Trustee’s duties?

Answer 1

(1) deal with the property with reasonable care (2) must maintain utmost degree of loyalty; and (3) is personally responsible if conduct alls beneath required standards

Question 2

Classifications of trusts

Answer 2

1) express trusts
- private
- charitable
2) trusts created by operation of law
- Resulting trusts: attempted to carry out an implied intent
- constructive trusts: remedy to prevent unjust enrichment

Question 3

what are the 5 main elements of a valid trust?

Answer 3

1) intent
2) identifiable corpus
3) ascertainable beneficiaries
4) proper purpose
5) mechanics and formalities

If I am poorly medicated

Question 4

elements of intent

Answer 4

1) split legal and equitable title

2) impose enforceable duties on holder of legal title

Question 5

identifiable corpus

Answer 5

trust property must be ascertainable with certainty

Question 6

ascertainable beneficiaries

Answer 6

any person that can take and hold title

Question 7

effect of no ascertainable beneficiaries?

Answer 7

property reverts to settlor

Question 8

proper purpose

Answer 8

anything except illegal, require trustee to commit crime, or contrary to public policy

Question 9

what is it called when settlor is the trustee?

Answer 9

declaration of trust

Question 10

what capacity must a trustee have?

Answer 10

take, hold, and manage property

Question 11

what happens no trustee is named?

Answer 11

court will appoint a replacement

Question 12

does trust need to be in writing?

Answer 12

can be oral unless it involves real property or is contained in a will

Question 13

pour over will

Answer 13

Will containing gift to previously existing inter vivos trust

Question 14

Testamentary secret trust

Answer 14

A will names someone as beneficiary but supposed to hold property for someone else, but not called a trust; courts allow “trust” beneficiary to seek a constructive trust remedy against will beneficiary

Question 15

testamentary semi-secret trust

Answer 15

testamentary gift is in trust, but doesn’t indicate beneficiaries

effect: trust fails and property passes through testator’s estate to successors in interest

Question 16

Discretionary trust

Answer 16

trustee determines how much beneficiary receives (so beneficiary has nothing to transfer, and nothing for creditor to reach)

Question 17

spendthrift trusts

Answer 17

beneficiary may not transfer interest of trust, creditors can’t attach to beneficiary’s trust interest

Question 18

support provisions

Answer 18

use of trust property limited to beneficiary’s support

standard = accustomed standard of living

Question 19

revocation of irrevocable trust?

Answer 19

in some states, possible if settlor received written consent of all living persons with vested or contingent interests

Question 20

when can beneficiaries moditify or terminate a trust

Answer 20

all beneficiaries agree, are legally competent, and settlor’s intent is not frustrated

Question 21

trustees implied powers

Answer 21

powers which are necessary or appropriate to carrying out the terms of the trust if those powers are not expressly forbidden by the trust

Question 22

Trustee’s full list of duties

Answer 22

1) duty of loyalty and good faith
2) avoid self-dealing
3) keep accurate records and render accountings upon demand
4) general standard of care
5) investments standard of care
6) duty to review trust property
8) duty of impartiality

Question 23

general standard of care

Answer 23

use the care and skill of a prudent person with regard to trust property: insulate trust property (label and segregate)

Question 24

prudent investor standard- portfolio approach

Answer 24

view all investments together, not individually; some speculation may be appropriate or required; also, diversification is required

Question 25

when is prudent investor standard measured?

Answer 25

time of decision

Question 26

duty of loyalty

Answer 26

must manage trust solely in the interest of beneficiaries

Question 27

C pres doctrine

Answer 27

if circumstances have made it impossible to carry out original trust purpose (for charitable trust), courts can alter provisions to follow settlor’s intent if settlor had a general charitable intent

Question 28

who is charged with enforcing charitable trusts

Answer 28

the attorney general