Trusts

Question 1

Validity of a trust

Answer 1

A trust of personal property is valid if it has a trustee, a beneficiary, and trust property

Trustee: manages the trust, can be appointed by court

Beneficiary: must be definite and ascertainable, same person can’t be sole trustee and sole beneficiary

Trust property (trust res): must be identifiable

Question 2

Revocability of a trust

Answer 2

Under the UTC, default rule is that trusts are revocable

Inter vivos trusts are revocable unless the trust instrument expressly states otherwise

A settlor may terminate the trust if all beneficiaries are in existence and all agree to the termination

Beneficiaries may terminate even an irrevocable trust if (1) all income beneficiaries and all remaindermen consent and (2) no material purpose of the trust is yet to be performed