Trusts Flashcards
In what circumstances will a spendthrift clause not shield from creditors?
(1) when the settlor is the beneficiary
(2) claims for alimony and child support
(3) claims by the government
In Florida, are trusts presumed revocable or irrevocable?
A trust is revocable in Florida and can be amended by the settlor unless the terms of the trust instrument expressly state that it is irrevocable.
The property of a revocable trust is subject to…
the claims of the settlor’s creditors during the settlor’s life to the extent the property wouldn’t otherwise be exempt by law if owned directly by the settlor
S tells his broker he wants to set up a trust for his daughter, with the corpus of the trust to consist of 100 shares of IBM stock in broker’s custody. S tells broker to transfer title of the stock to T as trustee. Before the transfer was made, S dies. What result?
No trust is created. To create a valid trust, there must be a delivery of assets to the trustee. The mere expression of an intent to create a trust without delivery of assets to trustee has no legal consequence. S’s death revoked the broker’s authority.
A condition that encourages a total restraint on marriage is…
void
S transfers Blackacre to trustee to pay the income to A for life, remainder to B. A is 75 years old. T proposes a 50 year lease on Blackacre. What result?
Trustee can give a lease that extends beyond the term of the trust. Generally, a trustee has virtually all powers a fee simple owner would have with respect to his own property. This includes granting a lease that may extend beyond the term of the trust. (I know this doesn’t make sense, just memorize).
A establishes a trust and conveys 1000 shares of IBM stock to trustee. The trust agreement states that T is to pay the income to B “for life” but no provision for disposition of trust corpus on B’s death. What happens when B dies?
T holds the property in a resulting trust for W or her estate. On termination of an express trust, if S hasn’t declared her intent, the interest is in the settlor, or if she is dead, it passes to her successors. The term “resulting trust” means reversion here.
An intervivos trust relating to real property must…
(1) be evidenced by a writing in compliance with the statute of frauds and
(2) be evidenced by a deed conveying title to the trustee
Sam created a trust of real property in writing. The property was properly described per the SOF and properly witnessed. A trust document provided that the property was “delivered” to the trustees. What result?
No trust arose because Sam failed to execute a deed conveying title. An inter vivos trust relating to real property must be evidenced by a deed conveying title to the trustee. The trust instrument didn’t constitute a conveyance because the statutory words of transfer (“grant” “bargained” and “sold”) do not appear. Deliver is not dispositive of conveyance.
Ned’s grandma loaned him money to buy a house. Ned took title to the house She made monthly payments on the house until 2007. In 2008, she paid the outstanding mortgage and demanded that Ned put title in her name. What result?
A court would find for Ned because a gift is presumed under the circumstances. When a plaintiff proves she paid the purchase price for property, a presumption arises that it was the parties’ intent that the person holding legal title held the property in trust for the person who paid (resulting trust). However, where title is taken by a close relative, a gift is presumed.
