Trusts Flashcards
Parties to a valid trust
Settlor, trustee, beneficiary
Elements of Trust
V.A.L.I.T.
Class Gifts
Trusts for a reasonably definite class
Omitted Children - Reasons to go back in
- Was not born when the trust was created
- Settlor was mistake as to the death of said child
- Settlor mistakenly/unintnetionally forgot to include.
Omitted Children - Reasons to go back in
- Was not born/adopted after the trust was created
- Settlor was mistaken as to the death/existence of said child
- Settlor mistakenly/unintentionally forgot to include.
Valid Defenses to Omitted Child
provided for outside the trust, or estate left to omitted child’s parent.
Challenges to the Validity of the trust
Undue Influence
Fraud
Challenges to the Validity of the trust
Undue Influence
S.C.O.M.
Sucesseptabiliy, - Testator succeptible to influence
Causation, - Influencer caused the unnatural result
Opportunity, - the opportunity to influence
Motive - influencer benefits
Fraud
Misrepresentation made with intent to decieve or influence the settlor.
Charitable Trust Elements
Fa.I. P
Failure to follow trust terms - trustee can sue for money back.
Purpose: Benefit the community at large
Indefinite Beneficiaries - community at large
Cy Pres Doctrine (SG)
Court may modify the trust but will analyze specific and general intent.
Specific - Court may not modify
General - Court may replace with similar charity.
LAPSE
Beneficiary dies before settlor, Trust lapses
Anti-Lapse
Beneficiary dies before settlor, Trust Goes to beneficiary suriviving child
Spendthrift Trust
Express Limitation on beneficiary power to transfer trust.
Creditor: Only reach money if for child, spousal support, basic necessities, or tax liens.
Duty of Care (T.I.P.P)
Duty to be IMPARTIAL
Duty to follow TRUST instructions
Duty to act as a PRUDent Person
Duty to make PRoperty Productive.
Duty of Loyalty (GF-BF)
- automatically breached when self-dealing is at play.
Act in GOOD-FAITH & FOR BEST interests
