Trusts

Question 1

requirements of a trust

Answer 1

intent
ascertainable beneficiary
assets
valid purpose

Question 2

what is the only kind of trust that must meet will formalities

Answer 2

testamentary

Question 3

what is cy pres

Answer 3

court can modify a charitable trust for alternative charitable purpose

intent of settlor governs. if specific, can’t transfer, bye trust. if general, make case that intent was something broader and transfer

Question 4

what are the remedial trusts

Answer 4

resulting

constructive

gift over

Question 5

what is a resulting trust

Answer 5

when trust fails, court makes resulting trust to have trustee to return it to settlor

Question 6

what is constructive trust

Answer 6

imposed when court decides person holding title would be unjustly enriched

Question 7

what is gift over clause

Answer 7

provides for disposition of property if trust purpose fails

Question 8

what does trustee of trust support have to do

Answer 8

provide as needed for B’s support

necessary = maintain standard of living

Question 9

what kind of trust is ‘support as necessary’

Answer 9

discretionary + support trust

Question 10

how does settle revoke a trust

Answer 10

according to terms or with act manifesting clear and convincing evidence of intent (will or codicil)

Question 11

how to terminate irrevocable non charitable trust if doing so doesn’t violate material purpose

Answer 11

by consent of all B’s if i) continuance is not necessary for material purpose or ii) isn’t inconsistent with material purpose

Question 12

how to terminate irrevocable non charitable trust if doing so does violate material purpose

Answer 12

by consent of B’s and settlor

Question 13

when can court modify a trust

Answer 13

1) if unanticipated changes not anticipated by settlor and change would further the purpose
2) or if there is an inability to manage trust effectivey

Question 14

does court need consent of Bs to modify a trust due to unanticipated changes

Answer 14

no

Question 15

who gets principal and who gets income

Answer 15

life B: income

remainder man: principal

location must be balanced to treat future and present Bs fairly

Question 16

how long do you have to disclaim a gift

Answer 16

must do it in writing within 9 months

Question 17

duties of trustee

Answer 17

loyalty (objective)
good faith (subjective)
no self-dealing (irrefutable presumption)

Question 18

remedies for trustee self dealing

Answer 18

Bs can set aside transaction or ratify and get the profits

Question 19

what is the prudent investor rule

Answer 19

trustee must act as prudent investor would with his own money (diversify, make productive, must oversee decisions)

Question 20

weird rule about what to do if there’s a class gift from a parent to surviving children

Answer 20

is limited to only kids that outlive the settlor. if kid predeceases, they take nothing

UPC modern: substitute gift is created in descendants of deceased kid so that it’s an anti lapse basically