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CA Essay Bar Studies > Trusts > Flashcards

Trusts Flashcards

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1
Q

Creation of Trust

A 
Clearly states intention of settlor 
To transfer property to trustee for 
Benefit of one or more ascertainable bennys
Majority: trust presumed irrevocable
UTC and CA: trust presumed revocable
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2
Q

Req of Trust

A 
Intent
Trust Property
Proper Purpose
Ascertainable Benny
Trustee
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3
Q

Intent Creation of Trust

A 
Evid intent to create trust 
Looking for precatory language
Spicer test
Exact wording used such 
As words of obligation
Specificity of language & writing 
Contained in document, and 
Whether description of use of 
Property objective or subjective
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4
Q

Trust Property Creation of Trust

A

Cannot be expectancy

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5
Q

Proper Purpose Creation of Trust

A

Cannot be illegal or against public policy

Must comply w/ RAP

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6
Q

Ascertainable Benny Creation of Trust

A

Must sufficiently describe bennys

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7
Q

Trustee Creation of Trust

A

Not necessary to be valid

Court will appoint if one not named

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8
Q

Invalidation of Trust

A

Ineffective if procured by duress,

Menace, fraud, or undue influence

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9
Q

Types of Trusts

A 
Intervivos
Testamentary
Pour Over Will
Secret/Semi-Secret
Charitable
Spendthrift
Support
Discretionary
Purchase Money Resulting Trust
Resulting
Constructive
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10
Q

Intervivos Trust

A

Created during lifetime of settlor
Must comply w/ SoF for real prop
May be oral for personal prop

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11
Q

Testamentary Trust

A

Created at death of settlor and irrevocable

Must comply w/ Statute of Wills

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12
Q

Pour Over Will

A

Regular will leaves residuary to trust
Must be in existence at time will made
Must be identified in will
May be modified in the future

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13
Q

Secret/Semi-Secret Trust

A

Appears to be trust but
Details known only to settlor and tee
Makes outright gift to tee

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14
Q

Secret Trust

A

Leaves money and extrinsic evid
Showing money was for particular purpose
But vague in its term

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15
Q

Semi-Secret Trust

A 
Leaves money and says 
“They know what to do with it” and 
Extrinsic evid showing money was for 
Particular purpose but vague
Majority: invalid and resulting trust
Minority: Extrinsic evid to prove trust
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16
Q

Charitable Trust

A

Set up for charitable purposes and

Benefits society

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17
Q

Cy Pres

A 
Objective becomes impossible or 
Impracticable to fulfill, courts 
Substitute similar charitable 
Object near as possible to original
Fails, creates a resulting trust
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18
Q

Spendthrift Trust

A

Benny cannot voluntarily or involuntarily
Alienate his interest
Protected from own irresponsibility and
Cannot transfer interest and most creditors
Cannot reach to satisfy claims

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19
Q

Exceptions of Spendthrift Trust

A

Creditors for necessities
Alimony and child support or
Government liens

20
Q

Support Trust

A

Directs tee to make limited distributions
To pay for benny’s support, health, etc. and
Not accessible by creditors if interferes

21
Q

Discretionary Trust

A

Tee discretion to distribute payments to benny

22
Q

Purchase Money Resulting Trust

A

Benny pays consideration for property but

Allows title to prop to be taken in name of another

23
Q

Resulting Trust

A 
Implied-in-fact trust based upon 
Presumed intent of parties and will 
Transfer trust property back to settlor if:
Purpose of trust satisfied
Express trust fails
Cy pres doctrine fails
Trust is illegal, or 
Semi-secret will
24
Q

Constructive Trust

A 
Remedy to prevent unjust enrichment if 
Self-dealing or breach of fiduciary duties
Fraud in inducement or undue influence
Secret trusts involved or 
Oral real estate trusts created
25
Q

Remedial Trust

A 
Equitable remedy by operation of law
Not subject to creation requirements or 
Statue of Wills or Frauds
Passive in sole duty of tee to convey
Trust prop to benny, then terminates
26
Q

Settlor Modification

A

May modify if trust revocable

27
Q

Irrevocable Trust Modification by Bennys

A

If bennys agree, can petition for
Modification unless continuance
Necessary to carry out material purpose

28
Q

Settlor and Bennys Modification

A

Written consent of settlor and all bennys
W/out court approval
If one benny does not agree,
Court may modify if settlor consents and
Interests of benny not substantially impaired

29
Q

Trustee Termination

A

No power to terminate

30
Q

Settlor Termination

A

If reserved power

31
Q

Irrevocable Trust Termination by Bennys

A

If bennys agree, can petition for
Termination unless continuance
Necessary to carry out material purpose

32
Q

Settlor and Bennys Termination

A

Written consent of settlor and all bennys
W/out court approval
If one benny does not agree,
Court may partially term if settlor consents and
Interests of benny not substantially impaired

33
Q

Court Termination Trust

A

If purpose becomes frustrated, impossible

Illegal, or if changed circumstances

34
Q

Duties of Tee

A 
Care
Loyalty
Administer	
Perform Personally
Invest Prudently
Diversify
Act Impartially
Segregate
35
Q

Duty of Care Tee

A 
Reasonable care, skill, and caution 
Under circumstances that 
Reasonably prudent person would do 
Acting in like capacity to accomplish 
Purpose of trust
36
Q

Duty of Loyalty Tee

A

Administer trust solely for
Interest of bennys

Self-Dealing or Over Two Trusts

37
Q

Self Dealing Duty of Loyalty Tee

A

Tee personally engages in
Transaction involving trust prop
Conflict of interest arises between
Tee’s duties and bennys

38
Q

No Further Inquiry Rule

A

Once self-dealing established

Per se breach

39
Q

Over Two Trusts Duty of Loyalty Tee

A

Sells, exchanges, or participates in
Sell or exchange between two
Not violation so long as fair & reasonable to bennys of both tee gives bennys notice of all material facts

40
Q

Duty to Administer Tee

A

In good faith, in accordance w/
Terms and purposes, and in
Interests of bennys

41
Q

Duty to Perform Personally Tee

A 
Cannot delegate performance that 
Can be reasonably done by tee and 
Cannot transfer office of tee
Performance delegated must be 
Properly supervised by tee
42
Q

Duty to Invest Prudently

A

CL: limited to acceptable investments
ML: fiduciary held to prudent investor

43
Q

Duty to Diversify

A

Diversify investments unless

Under circumstances prudent not to

44
Q

Duty to Act Impartially

A

Includes balancing interests of

Present and future bennys

45
Q

Duty to Segregate

A

Keep trust prop separate from

Other prop and no commingling

46
Q

Allocate Income/Expenses Tee

A

Generally old rule, bennys entitled to
Income from interest income, cash dividends
Net business income, but must
Pay interest on loan debt, taxes, or
Minor repair and remaindermen
Entitled to principal from net proceeds on
Sale of asset, stock dividends, and
Profits from sale of stock, but must
Pay principal of loan debt and major repairs

47
Q

Liability of Tee Breach

A

Ratify transaction and waive breach
Surcharge tee by suing for resulting loss
Trace and recover prop
Seek to discharge tee and replace him

CA Essay Bar Studies (15 decks)

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