Trusts and Estates

Question 1

Validity of Trust

Answer 1

1. trustee
2. definite and ascertainable beneficiary
3. identifiable trust property
4. proper trust purpose
5. intent to create trust

Trust does not fail if there is no named trustee – court may appoint one

Same person cannot be sole trustee and sole beneficiary

Question 2

Revocability of Trust

Answer 2

Revocable trust – settlor may terminate trust if all beneficiaries exist and agree

Trust becomes irrevocable once settlor dies

irrevocable trust may be modified or terminated upon consent of all beneficiaries, income and remaindermen. May also be terminated as long as there is no material purpose left for the trust to perform

Question 3

Types of Trusts

Answer 3

1. Pour-over will
2. Discretionary Trust
3. Support Trust
4. Spendthrift Trust
5. Charitable Trust

Question 4

Pour-over Will

Answer 4

Created when a will divests a gift into a trust

valid so long as trust is identified in the will and terms are incorporated in a writing that is executed before or with the will

Amendments to will after execution:

1. Modern law – okay
2. Common law – not valid

Question 5

Discretionary Trust

Answer 5

Trustee has discretion to decide when to make a distribution to a beneficiary

Beneficiary cannot demand any disbursements

Creditors cannot demand disbursement

Child support and alimony can be taken from this trust, though

Question 6

Support Trust

Answer 6

Trustee must pay what is necessary for the beneficiary’s support

Question 7

Spendthrift Trust

Answer 7

Restrains both voluntary and involuntary alienation or transfer of a beneficiary’s interest

Creditors are generally not allowed to access these funds except for:

1. child support/spousal support
2. judgment creditor who provided services for protection of beneficiary’s interest in trust;
3. the government;
4. creditor for claim of necessaries