Trusts Flashcards
How is a valid trust created?
To create a valid trust, there must be (i) a settlor who, (ii) intending to create a trust for a valid trust purpose, (iii) delivers the trust property to the trustee to hold (iv) for the benefit of one or more beneficiaries.
What happens if there are no trust assets when the trust instrument is executed?
If there are no trust assets when the trust instrument is executed (i.e. the settlor promises gratuitously to create a trust in the future), a trust arises in the future only if, when the assets come into existence, the settlor manifests anew an intention to create the trust. This remanifestation is not required, however, if the promise is supported by valid consideration.
What is merger of title and what is the result of merger of title?
Merger of title results in termination of a trust where the sole trustee is also the sole beneficiary.
How does one create a pour-over gift from a will to a revocable trust?
Under the traditional view, to create a valid pour-over gift from a will to a revocable trust, the trust must be in existence or must be executed at the time of the will’s execution. Under the prevailing view, a will may devise property to a trustee of a trust established or to be established during the testator’s lifetime, i.e. the trust may be established after the will is executed but before the testator’s death. Additionally, pour over gifts are valid even if the trust is unfunded during the testator’s lifetime and even if the trust is amended prior to the testator’s death.
