Trusts Flashcards
The Louisiana Trust Code defines a trust as
a legal relationship resulting from the transfer of the property from the settlor to a trustee and does so on behalf of a beneficiary
Trusts are created when
someone (the settlor) transfers title to property to a trustee, who administers the trust in accordance with the settlor’s wishes for the benefit of the beneficiaries.
A testamentary trust
a trust created by a will (mortus causa)
a testamentary trust must be in the form of a will (formalities of the will must be followed)
Inter Vivos trust
a trust created while an individual is alive
An inter vivos trust may be created by an authentic act or a signed writing in the presence of two witnesses and duly acknowledged by the settlor or by the affidavit of one of the attesting witnesses.
a trust contains immovable property, the trust instrument, or an extract of trust, must
it must be recorded in the parish where the property is located.
Where the trust was to be in operation for a specified number of years, or until the occurrence of a prescribed event, and that period of time has elapsed or the incident has occurred
, the trust ordinarily terminates in accordance with the instrument’s terms.
Trusts in Louisiana are indestructible. Once they are set up, the consent of all the settlors, trustees, and beneficiaries still cannot effectively terminate a trust unless
the trust instrument so provides
A trust may be revoked, in whole or in part, by the settlor only if
he has reserved a right to revoke or an unrestricted right to modify its terms.
a valid trust has been created, the settlor may modify the trust only
to the extent allowed by the terms of the trust.
If the trust instrument itself allows a party, not a beneficiary, to add or remove beneficiaries of the trust, that is allowable as long as
all of the affected beneficiaries are descendents of the person giving the power to modify
court can modify or terminate a trust in whole or in part if
a. complying with the terms of the trust would defeat or substantially impair the purposes of the trust; or
b. its market value is less than $100,000 and, in relation to the administrative costs, continuing the trust unchanged would defeat or substantially impair its purposes
A court may terminate a trust prior to the time fixed in the trust instrument if
a. the purposes of the trust have already been accomplished and it would be pointless to continue; or
b. the trust purposes have become illegal or impossible to execute
What is the maximum duration of a charitable trust?
Charitable trusts have no maximum duration. Their duration is perpetual unless the trust instrument provides otherwise.
The cy pres doctrine allows individuals to petition the court to authorize departure from the express conditions, charges, or terms of the trust because of:
some change in circumstance which has rendered the trust impossible, illegal, or immoral to administer. Modify the trust to a purpose as close to the organization as possible
may designate a class of persons as beneficiaries, limited to
relatives of the settlor.
Acceptable family members are children, grandchildren, great grandchildren, nieces, nephews, grandnieces, grandnephews, and great grandnieces and great grandnephews, or any combination thereof.
