Trusts Flashcards
Default term if at least one income beneficiary is a natural person
Death of last income beneficiary who is natural person
Default term if settlor is a natural person but no income beneficiary is
20 years from death of settlor
Default term if no income beneficiary or settlor is natural person
50 years from creation
Maximum term if one settlor and one income beneficiary are natural persons
Later of death of last income beneficiary or 20 years after death of settlor
Maximum term if one income beneficiary is a natural person but no settlor is
Later of death of last income beneficiary or 20 years after creation
Maximum term if one settlor is natural person but no income beneficiary is
20 years from death of settlor
Maximum term if no settlor or income beneficiary is a natural person
50 years from creation
When may a settlor name a substitute principal beneficiary?
- Irrevocable trust if: (a) substitute is descendant of principal beneficiary, and (b) principal beneficiary died without descendants
- Revocable trust: any time before trust becomes irrevocable
May name one of settlor’s descendants as substitute
What is the general rule upon principal beneficiary’s death?
Interest goes to successors
If they die before trust is in existence, and they are the settlor’s descendant, sibling, or a descendant of either, then the principal beneficiary’s descendants become principal beneficiaries
When may a settlor name a substitute if the principal beneficiary’s interest is the legitime in trust?
Only if:
- Principal beneficiary dies intestate
- Without descendants
Termination of income interest
- Death
2. Expiration of period of enjoyment
What happens upon termination of income interest?
If only one, principal beneficiaries become income beneficiaries
If more than one, other income beneficiaries get the interest
