Trusts Flashcards
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terminating trust with consent of all beneficiaries
A trust may terminate by consent if all beneficiaries and the trustee consent to the termination. Under the Claflin doctrine, a trustee can block a premature trust termination—even one to which all beneficiaries have consented—if the trust is shown to have an unfulfilled material purpose. Most courts allow the trustee to block the termination if it can be shown that termination would violate the settlor’s intent.
Class gift
A class remains open and may admit new members until (i) at least one class member is entitled to obtain possession of the gift, or (ii) the preceding interest terminates (such as when the holder of the present life interest dies).
Trust, generally
To create a trust, the grantor must have intended to create the trust. A trust is valid as long as it has a trustee, an ascertainable beneficiary, and assets. Trust interests are alienable, devisable, and descendible unless the terms of a trust expressly or impliedly provide otherwise.
trustee–> legal title
beneficiary –> equitable title
Revocable, whats the default?
In most jurisdictions, a trust is presumed to be revocable unless it expressly states that it is irrevocable. UTC § 602(a).
In a discretionary trust, when has trustee abused discretion?
The trustee does not abuse his discretion unless he acts dishonestly or in a way not contemplated by the trust creator.
RAP and Trusts
Trusts are subject to the Rule Against Perpetuities, meaning that a trust may fail if all interests there under may not vest within the applicable period of perpetuities (usually a life in being plus 21 years).
Some jurisdictions take a “wait and see” approach to the application of the rule, refraining from invalidating future interests until it is clear that they will not vest within the perpetuities period.
Can same person serve as sole trustee and sole beneficiary?
NO. Title merges and trust terminates
will a trust fail if settlor failes to designate a trusee?
NO! If the settlor fails to designate a trustee, then the court will appoint a trustee.
Express Private Trust Creation
i) The settlor has capacity to create a trust;
ii) Clearly expresses a present intent to transfer ownership of
iii) Property to
iv) A trustee who has duties to perform
v) For the benefit of one or more definite or ascertainable beneficiaries
vi) For a valid purpose.
Testamentary trust
A testamentary trust is a trust that enters into
existence upon the death of a person and disposes of their property.
Such trusts must be executed with the same formalities of a will.
Res/property requirement for trust
Trust not created until it receives valid property,. but does not hav eto be contemporaneous with the signing.
A “pour-over” trust , which is valid even if made before there is identifiable trust property.
Pour-over provison
vested remainder mpc apprach
under the UPC, if a class gift is limited in favor of a class of children, only those children alive at the time of distribution are entitled to possession of the property. If a child who survives the settlor but then predeceases the time of distribution has surviving issue, that issue would have a right to the parent’s share of the gift. T
