Trusts Flashcards
Express Trust
definition
Created when a person, or a settlor, gives his property to another person, or a trustee, to hold and manage for a beneficiary.
Benefits of Trusts over Wills
(What benefits do trusts offer that wills do not?)
- Permits inter vivos or by will
- No probate required
- May be created orally (just need clear and convincing evidence of the terms of the trust)
Requirements for the Creation of an Express Trust
1. Capacity: settler intends to create a trust and transfers property to the trustee.
2. Duty: the settler must assign the trustee with duties.
3. Ascertainable Beneficiaries: can’t be someone of the trustee’s subjective choice.
* trustee may not serve as the sole beneficiary.
4. Purpose: the purpose of the trust must be valid.
* must be lawful
* not contrary to public policy
* cannot be void; not created under undue influence or fraud.
Charitable Trust
definition: trust created for a charitable purpose (e.g., relieve poverty, advance education, benefit the community).
Creation
* No ascertainable beneficiary requirement
Cy Pres Doctrine
If charitable purpose becomes:
- Unlawful,
- Impracticable,
- Impossible to Achieve, or
- Wasteful
The trust does not become void – the court modifies the terms of the trust consistent with the settler’s intent.
Honorary Trust
Noncharitable trust that lacks a beneficiary.
Pet Trust: trust created for the care of an animal
- Animal was alive during settler’s lifetime
- Terminates upon death of last animal
Cemetary Trust: maintenance of a grave
Spendthrift Trust
A trust that contains a spendthrift provision against creditors; creditors are preventing from reaching trust property before it is distributed to the beneficiary.
- Must restrain voluntary and involuntary transfer.
Exceptions
1. Unenforceable against child/spousal support
2. Services to protect beneficiary’s interest
3. Government claim
Remedial Trust
definition: an implied trust that arises by court order or operation of law to prevent unjust enrichment.
