Trusts

Question 1

Formation

Answer 1

A valid trust requires:
1) a definitive beneficiary;
2) a settlor with capacity;
3) an intent to create a trust;
4) a trustee
5) a valid trust purpose;
6) trust property
AND
7) compliance with State Formalities

Question 2

Trustee Duties

Answer 2

Duty of Care
Duty of Loyalty
Duty to Distribute in Accordance with Trust Instrument

Question 3

Modification (trust)

Answer 3

A trust may only be modified by a settlor
a) who expressly reserved the power to modify the trust;
OR
b) who has the power to revoke the trust. (power of revocation is also power to amend)

Question 4

Revocation

Answer 4

A revocable trust may be revoked either
a) by any method of revocation provided in the trust instrument
OR
b) by a writing signed by the settlor

Question 5

Termination of Irrevocable Trust

Answer 5

Irrevocable Trust may be terminated if:
a) the settlor AND all of the beneficiaries agree to do so;
b) all of the beneficiaries agree and it will not frustrate the purpose of the trust.

OR

by operation of law by merger

Question 6

Termination of Revocable Trust