Trusts Flashcards
A Trust is…
a fiduciary relationship in which one party (trustee) hold legal title to property for the benefit of designated beneficiaries
settlor
person who created the trust
revocability of trusts
generally yes, unless trust terms expressly state trust is irrevocable
express trust
created by settlor’s express intent
private trust
created for benefit of certain defined or ascertainable persons
two ways to create a private trust
inter vivos
by will
charitable trust
created for the benefit of an indefinite class of people or the public generally
Resulting trust
trust that is implied or imposed by law
when does a resulting trust usually occur
when an express trust fails for some reason
constructive trust
equitable remedy used in cases to rectify unjust enrichment or wrongful conduct
Elements of a Valid Express Trust (6)
- settlor with capacity to convey
- settlor has clear present intent to create a trust
- competent trustee with duties
- definite beneficiary
- present and clear disposition of settlor’s specific property in trust
- valid trust purpose
Powers of a trustee
may only exercise powers expressly or impliedly conferred
Duties of a trustee
duty to administer in GF duty of loyalty (no self dealing) duty to report to benficiaries duty to not commingle duty to enforce claims and keep records duty to preserve property and make it productive
What is a protective (discretionary/support) trust
restrict beneficaries access to trust property by terms of the trust
Creditors & Protective Trusts
because beneficiaries have limited access to trust property, their creditors are limited in accessing the beneficiaries trust interest
