Trusts Flashcards
What is a support trust?
One in which the trustee is required to pay or supply so much of the trust as necessary for the support of the beneficiary and the trustee has no discretion to refuse.
What is the function of a discretionary trust?
The trustee is given discretion whether to apply or withhold payment of trust property to the beneficiary, which limits the rights of the beneficiary to the amounts the trustee decides not to give her.
When may a trust be terminated?
If all the beneficiaries consent and modification will not interfere with a material purpose of the trust.
Most states do not permit a guardian to consent to the termination of a trust on behalf of:
Unborn beneficiaries
When can the court terminate a trust prior to the time fixed in the instrument?
If the trust purposes are accomplished early or the trust purposes become illegal or impossible to carry out.
3 requirements for a valid trust:
- There must be a settlor
- Who intends to create a trust for a valid trust purpose
- And delivers the trust property to the trustee to hold for the benefit of one or more beneficiaries.
What is the function of a merger of title?
It results in termination of a trust where the sole trustee is also the sole beneficiary.
What is the traditional and prevailing view of creating a valid pour-over gift:
Traditional = trust must exist at the time of the will's execution Prevailing = a will may devise property to a trust established/to be established
What is a spendthrift trust?
One in which the beneficiary is unable voluntarily or involuntarily to transfer his interest in the trust.
When may a creditor collect from a trust?
When the settlor is a beneficiary of the trust
What happens when a portion of a trust fails for lack of a beneficiary?
A resulting trust in favor of the settlor or the settlor’s successors is presumed.
What is the cy pres doctrine and what is its function?
Applies when a specific charitable purpose indicated by the settlor is no longer possible or practical and the settlor manifested a general charitable intent; allows the court to direct the trust property to be applied to a similar charitable purpose.
