Trusts

Question 1

Trust

Answer 1

D-SEBLeT (Disposition Separates Equitable Bs Legal T)

1. Disposition of property which;
2. Separates Equitable to Bs and Legal title to T;
3. T manages for benefit of Bs.

Question 2

Trust validity (elements of)

Answer 2

1. Manifestation of intent to create (no writing unless realty);
2. Existing trust res;
3. Ascertainable beneficiaries; and
4. Delivery or declaration.

MIRAD

Question 3

Manifestation of intent to create a trust

Answer 3

1. Substance over form (no particular words);
2. Expression by S for T to hold for B;
3. Not Precatory.

SOFEP (Substance Over Form Expression Precatory)

Question 4

Proper trust purpose

Answer 4

1. Destruction of property
2. Religion
3. Illegal
4. Public policy
5. Marriage

DRIP-M

Question 5

Testamentary Trust

Answer 5

1. Will must be valid;
2. Testator must have Capacity;
3. Testamentary Intent; and
4. Formalities followed.

CIF

Question 6

Will validity

Answer 6

1. Adult, of sound mind, Duress, Undue influence, Mental infirmament, Suspicious circumstances;
2. Know nature and extent of property and testamentary act;
3. 2 disinterested Ws or holographic.

ADUMS-NETAD

Question 7

Beneficiary rights to compel distributions - types of trusts

Answer 7

1. Mandatory
2. Discretionary with standards
3. Absolute discretion

Question 8

Spendthrift trust

Answer 8

1. Bars B’s creditors from attaching trust property (involuntary alienation); nor can
2. B sell or gift away their interest (voluntary alienation);
3. Both must be present for valid spendthrift C protection.

Question 9

Pour-over will

Answer 9

1. Testator names T of pre-existing (or concurrent) trust as B of probate estate;
2. incorporated by reference in the will
3. Must be a valid will (ADUMS-NETAD).

Question 10

B rights to distribution

Answer 10

1. Mandatory, see terms
2. Partial discretion, see terms
3. Pure discretion, good faith.

Question 11

Creditors’ rights to attach

Answer 11

1. C has no greater right than debtor;
2. S’s debts, irrevoable or revocable;
3. T’s debts, earmark or breach;
4. B’s debts, mandatory or discretionary.

Question 12

Spendthrift provision

Answer 12

1. Restricts voluntary and involuntary alienation;
2. Substance over form;
3. Not inferred unless support trust.

Question 13

Support trust

Answer 13

1. Spendthrift by default;
2. B has necessaries.

Question 14

Protective trust

Answer 14

1. Mandatory until C tries to attach;
2. Converts to discretionary.

Question 15

Modification of a trust

Answer 15

1. Termination - merger of title, no res, or fails purpose (resulting trust);
2. Terms of trust control;
3. RIVT, T owes no duty to S;
4. Irrevocable, modify if all Bs and S agree;
5. If S died, modify if all Bs agree and no substantial impairment of purpose.

Question 16

Claflin doctrine

Answer 16

1. Unanimous Bs and
2. no Substantial impairment of material purpose;
3. UTC, no unanimous if non-consenting Bs interests protected;
4. Restatement requires unanimous Bs but applies balancing test.

USIMP-NUNC-RUB (Unanimous Substantial Impairment Material Purpose - No Unanimous Non Consenting Restatement Unanimous Balancing)

Question 17

Equitable deviation (changed circumstances)

Answer 17

1. Unanimous Bs
2. Status quo would substantially impair;
3. Modernly, modify if furthering trust purpose for admin and dispositive terms.

USQIS-FAD (Unanimous Status Quo Impair Substantially Further Admin Dispositive)

Question 18

Charitable trust

Answer 18

1. Manifest intent;
2. Res
3. Charitable purpose (poverty, health, education, religion, public benefit);
4. No RAP.

MIRPHERP (Manifest Intent Res Poverty Health Education Religion Public)

Question 19

Cy pres

Answer 19

1. Modify if
2. Illegal, impracticable, or impossible
3. finding of General charitable intent
4. As close as possible
5. Modernly, general intent is presumed; and
6. Reasonable approximation sufficient.
7. Resulting trust if counter to S’s intent.

III-GAPAR (Illegal Impracticable Impossible General As Presumed Approximation Resulting)