Trusts

Question 1

Express Trust

Answer 1

Created when person has the intent to create a trust and complies w requisite formalities

Question 2

Valid Express Trust

Answer 2

Settlors intent to create
Trust Property
Ascertainable beneficiary exists
Trustee has duties to perform
No same person as trustee & beneficiary

Question 3

Settlors intent

Answer 3

Split of legal and equitable title
Enforceable duties imposed on trustee
Present donative intent

Question 4

Split of title

Answer 4

Splitting of legal and equitable title

Sole trustee cannot be sole beneficiary

Question 5

Trust Property

Answer 5

Must be ascertainable w certainty

Can be any property that one can transfer

Question 6

Beneficiary

Answer 6

Can be anyone that can obtain and hold title

Question 7

Honorary trust

Answer 7

Set up to benefit non-human, non-charitable purpose

Question 8

Purpose

Answer 8

Any lawful purpose

Question 9

Inter vivos Trust

Answer 9

Declaration of trust

Conveyance in trust

Question 10

Declaration of Trust

Answer 10

Settlor and trustee the same

Question 11

Conveyance in trust

Answer 11

Settlor transfers title

Question 12

Testamentary Trust

Answer 12

Created upon settlor’s death

Provisions included in valid will

Question 13

Trustee

Answer 13

Fiduciary
Must have duties/powers
Capacity to take and hold title and manage property

Question 14

Pour over trust

Answer 14

Devises property to previously existing trust
Doesn’t create, but transfers to
Can’t be testamentary trust
Look to property at death, not execution

Question 15

Testamentary Secret Trust

Answer 15

Settlor and beneficiary agree but will doesn’t indicate agreement
Beneficiary may be entitled to constructive trust

Question 16

Testamentary Semi-Secret Trust

Answer 16

Gift says “in trust” but doesn’t indicate beneficiaries or terms
Trust fails

Question 17

Discretionary Provisions

Answer 17

Trustee can exercise power and discretion to make good faith determinations regarding when and how much to be distributed

Question 18

Spendthrift Provisions

Answer 18

Beneficiary cannot transfer interests AND creditor cannot reach beneficial interest
Ineffective if settlor is beneficiary

Question 19

Support Provision

Answer 19

Limited to health, education, maintenance, & support

Standard of support- beneficiary accustomed std of living

Question 20

When does a trust end?

Answer 20

According to its own terms
Settlor can modify/revoke unless expressly irrevocable
Operation of law- purpose fulfilled, illegal, impossible, change circumstances

Question 21

Trustees Express Powers

Answer 21

In trust instrument
Statute
Case law

Question 22

Trustee Powers

Answer 22

MUST manage exclusively for benefit of ALL beneficiaries AND administer the trust in good faith pursuant to the terms & purpose of trust

Question 23

Requirement if more than one trustee?

Answer 23

Majority of trustees required to act

Question 24

Trustee’s Mandatory Power

Answer 24

“You must pay A X amount per month”

Question 25

Trustee Discretionary Power

Answer 25

Reasonably prudent person reviewed under abuse of discretion

Question 26

Trustee Duties

Answer 26

``` Follow Terms Duty of Loyalty Duty of Good Faith Duty to Keep Accurate Records Duty to Exercise Care ```

Question 27

Prudent Investor Rule

Answer 27

Trustee act as a prudent investor | Court takes the portfolio approach in determining breach

Question 28

Remedy

Answer 28

Beneficiary can seek $ damages and removal of trustee

Question 29

Personal Liability of Trustee to 3d Party

Answer 29

Only liable for torts if personally at fault

Question 30

Charitable Trusts

Answer 30

Doesn’t need clearly ascertainable beneficiaries Purpose of accomplishing substantial social benefit General charitable intent NO RAP

Question 31

Doctrine of Cy Pres

Answer 31

Allows court to modify terms “as near as possible” to original intent Available if: Property in trust for charitable purposes AND settlor manifested general charitable intent

Question 32

Resulting Trust

Answer 32

Arises by implication from settlor’s conduct | Only applicable for settlor or successors in interest

Question 33

Constructive Trust

Answer 33

Equitable remedy Must plead and prove in court Requires particular property and conduct must arise in connection to property