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UBE Bar Exam Flashcards > Trusts > Flashcards

Trusts Flashcards

1
Q

Creation of Valid Trust

A

(1) intent to create (2) trust property (3) beneficiares (4) trustee (5) a valid trust prupose

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2
Q

Settlor

A

must have capacity to convey

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3
Q

Irrevocable trust

A

settlor must have legal power to convey trust property

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4
Q

Undue Influence

A

contestants must establish that the product of the influence “but for” influence

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5
Q

Intent

A

must have definite terms

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6
Q

precatory language

A

does not create a trust

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7
Q

Trustee

A

trust will not due to death, removal, resignation of the trustee

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8
Q

Duty to Administer

A

in good faith and prudent manner

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9
Q

Duty of Loyalty

A

no self dealing

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10
Q

Specific Self-Dealing Rules

A

(1) cannot buy or sell trust assets (2) cannot buy assets from one trust to another (3) cannot borrow trust funds or make loans to trust

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11
Q

Duty of Impartiality

A

trustee must act for the benefit of the beneficiaries, if over 1 B then act impartially

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12
Q

Duty to Separate and Earmark Property

A

trust assets must be physically separated from trust’s personal assets of other trusts

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13
Q

Duty to Perform Personally

A

trustee must perform functions that a RPP wouldn’t delegate

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14
Q

Delegation of Investment and Management

A

OK if reasonable care, skill and caution in (1) selecting the agent (2) establishing the scope and terms of the delegation AND (3) monitors the agents performance and complies with terms

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15
Q

Duty to Preserve Trust Property and Make it Produce

A

(1) collect all claims due to trust (2) lease land and manage it (3) record recordable documents (4) invest trust funds

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16
Q

Remedy to Beneficiary for Violation

A

(1) b can ratify to accept improper conduct (2) sue for full surcharge or amount lost to trust

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17
Q

Removal of Trustee

A

court may remove if actions are detrimental to the interest of the B.

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18
Q

Commission of serious breach of trust

A

grounds for removal

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19
Q

Incapacity

A

grounds for removal

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20
Q

Unfitness/Drunkenness, old age, practical inability

A

grounds for removal

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21
Q

Refusal to post Bond of account

A

grounds for removal

22
Q

Existence of a significant conflict of interest

A

grounds for removal

23
Q

Trustee insolvency

A

grounds for removal

24
Q

Extreme friction between trustee and beneficiaries

A

grounds for removal if interfere’s with proper administration of trust

25
Prudent Investor Rule
standard when determining priority of investments. Basic duty to invest prudently. Examine probably income and safety of preservation. Must diversify investments
26
Investment performance
measured by OVERALL RETURN
27
Trust property
where no trust property, trust fails.
28
Real Property trsut
must be in writing
29
Trust of tangle property
need not be in writing
30
Promise for future trust
must be supported by consideration, can arise when property is acquired w/o manifestation of intent
31
Beneficiaries
trust requires (1) definite (2) ascertainable beneficiaries UNLESS charitable or honorary trusts
32
Timing if Beneficiary Identity
not at time trust is created but when interest vests
33
Purpose of a Trust
trust is invalid if purpose is (1) illegal (2) contrary to public policy (3) impossible (4) intended to defraud creditor or (5) based on illegal consideration
34
FL RAPS
(1) must vest within 21 years after death of life in being OR (2) vests or terminates w/n 360 years
35
Spendthrift Trusts
B cannot transfer interest and creditors are precluded from reaching it to satisfy claims. When trust property is distributed then subject to creditor's reach
36
Exception to Spendthrift Trusts
Cannot be used to shield from (1) creditors where B is settlor (2) claims for support, alimony, and services to protect his interest (3) claims by the government
37
Charitable Trusts
(1) identifiable beneficiaries (2) may be perpetual (3) cypress doctrine applies (4) RAPS DOES NOT APPLY
38
Charitable Trust Purpse
must benefit the public
39
Cy Pres Doctrine
applies when cannot enforce charitable trust. if settlor has general charitable purpose vs specific, court will select alt. charity to be "as near as possible" to settlor's intent
40
Support Trust
provides for B''s support: (1) housing, (2) food (3) tuition. No right for luxuries. Can be mandatory or discretionary
41
Discretionary Trust
grants discretion to make distributions. B cannot compel distribution. Court only orders if ABUSE.
42
Totten Trust
bank account where trustee cakes withdrawals during and deposits during life. B has no right until T dies
43
Pour Over Gift from Will to Trust
(1) trust must be in existence before or concurrent with will (2) trust may be amendable or revocable (3) gift is valid even though trust unfunded during settlor's lifetime
44
Homestead Property
cannot be made into a gift or transfer title by deed unless settlor is joined by his spouse
45
Automatic Termination of Trust
occurs when (1) end date specified (2) purpose is accomplished (3) unlawful (4) contrary to public policy (5) becomes impossible
46
Can a Trust be amended or revoke?
Yes unless it expressly states its irrevocable
47
Continuation of trust uneconomical (under 50K)
grounds for termination
48
When is modiciation allowed?
(1) consistent w/purpose (2) best interest of B (3) modification achieves tax objectives (4) reformation needed to correct a mistake
49
Resulting Trust
express trust terminates and and settlor is B of resulting trust. conveyance of property under express trust and (1) trust is void OR (2) B is dead and can't be located.
50
Resulting Trust will not be Implied when
(1) trust says what to do when trust fails (2) settle was given consideration for original transfer in trust (3) trust is illegal purpose (4) Cy Press is applicable
51
Constructive Trusts
prevents unjust enrichment. trustee's only duty is to give trust property to whoever should have had it BUT FOR wrongful conduct. BOP is clear and convicing

UBE Bar Exam Flashcards (13 decks)

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