Trusts Flashcards
7 requirements for creating a trust
- settlor
- intent
- trustee
- trust res
- ascertainable beneficiaries
- valid purpose
- real property requires a writing to satisfy SOF
Settlor’s capacity must be clear of
Duress
fraud
mental capacity (issues)
undue inflience
or mistake
If fraus, duress, undue influence or mistake is found in a provision of the trust what happens?
that provision is struck and the remainder remains
What is a “valid purpose” of a trust?
- lawful
- not against public policy
- possible to achieve
Who can revoke a Revocable trust?
always revocable by settlor or grantor
Is an irrevocable trust never able to be revoked?
Yes, unless by ct order
What is the** remedy** for breach of trust
removal of trustee
What are damages awarded when a breach of trust is found?
money damages
Trustee’s Duties
- admin in good faith
- loyalty (no self dealing)
- impartiality
- preudent admin
- trsut accounting/ keep benes informed
What is a spendthrift provision?
a provision that prevents creditor’s bene to take any money from the trust unless for alimony, child support, and taxes.
elements of undue influence from Carpenter
- bene is present at execution
- testator wants to draft will
- bene reccomends legal counsel
- bene has knowledge of assets in will
- bene gives instruction on how to draft the will
- bene proures witness
- who safekeeps the will
Settlor requires
- capacity
- right to covey property
can be multiple
When is intent manifested?
at creation
T/F intent to create a trust must be written
False it can be oral or written
Can a trustee be the settlor
yes
T/F trustee can be reasonably compensated
true; and fully reimbursed for expenses used to admin the trust
How does a trustee properly decline to act
must be in wiritng to settlor or benes
How does a trustee properly accept duties?
- substantially comply with trust provisions
- accepting deliver of trust property
- perfome duties
how does a trustee properly resign
1 through ct approval OR
30 days written notice to settlor if alive and or benes
why would a trustee be removed?
- incapacitation
- serious breach of trust duties
- by the Ct
- if settlor or benes have standing to bring action
Once removed, ct will appoint new trustee
what can be included as trust res?
- real property
- tangible property
- intangible property
- business interest
- contingent assets
Trust res must be
- property or rights owned at the time of trust execution
- specific and identifiable
When must benes be ascertainable?
now or in the future subject to RAP
T/F: settlor can never be bene
false; they can so long as they are not sole beneficiary and sole trustee too
hows does a bene accept and disclaim their trust interest?
Acceptance is presumed
Disclaimer must be in writing
can trusts be without definite bene?
yes,
1. charitable trusts
2. pet trusts
3. trusts for non-charitable purposes
4. trustee to select bene from indefinite class
Trustee’s Powers
- buy/sell/invest/mortgage/pledge trust property
- prosecute/defend/compromise lawsuits
antilapse statute
substitute another beneficiary for the predeceased devisee.
