Trusts Flashcards
If a settlor transfers property in trust, with a life estate in the settlor or someone else, and the remainder in “the settlor’s heirs,” then the _____ treats this language as creating a reversion in the settlor and not a remainder in the heirs.
Doctrine of Worthier Title.
The settlor is the person who _______ a trust.
Creates
In the common law, no _______ are required to create a trust.
Formalities
The 5 types of trusts are:
- Inter vivos
- Testamentary
- Revocable
- Irrevocable
- Charitable
The 6 requirements for a valid express trust are:
- Intent to create a trust
- Valid purpose
- Competent Settlor
- Property (res or corpus)
- Trustee
- Identifiable beneficiary
A trust is a _________, not an entity or a document.
Fiduciary relationship
Spendthrift Trust
Provision that prevents the beneficiary from assigning or selling the beneficiary’s interest, and prevents the beneficiary’s creditors from attaching the interest.
Discretionary Trust
Provides the trustee discretion about when and how to make distributions.
Revocable Trust
A trust that the settlor may revoke or modify.
Cy Pres Doctrine
Modification of an irrevocable charitable trust’s purpose restriction when a restriction on the use of property in a charitable trust becomes impossible, impracticable or illegal.
Trust Decanting
Process by which a trustee, acting within the trustee’s fiduciary duties, pours the assets of a trust from an old trust to a new trust.
Trust Merger
When legal and equitable interests of a trust are held by the same party - such a trust is terminated.
Trust Breach
What happens when a trustee fails to carry out one or more of her fiduciary duties.
Perpetuities Savings Clause
To protect against an inadvertent violation of the Rule Against Perpetuities, a trust clause that provides that all interests will be distributed outright at the expiration of a period defined in the clause.
Measuring Lives
Refers to the persons, usually beneficiaries named in a trust, whose life spans determine how long a property owner could exert control over property. Measuring lives are determined at the time the interest in property is created.
