Trusts and Future Interests Flashcards
what are the requirements of a valid trust?
need a
1. trustee
2. benefiaciary
3. and trust property
kinds of trusts
- pour over will
- spend thrifts
3.
modification of a trust
- presumption of revocability
- Revocable
What is the presumption of revocability
an inter vivos trust is presumed to be revocable unless the instrument expressly states otherwise
what is a revocable trust
revocable= amendable, even if the trust instrument
does not expressly grant the settlor the power to amend.
power to revoke should equal power to amend
what is a class gift
Rule of convenience: when a class gift is made to a group of individuals, such as the children of a named person, the class closes (i.e., additional individuals may not join the class by satisfying the class eligibility requirements) when at least one member is entitled to distribution.
what is the upc approach to class gifts
when a class gift is made, each living beneficiary will take his share and a deceased beneficiary’s share will pass to
the deceased’s surviving descendants, regardless of whether the beneficiary is related to
the settlor.
upc=pass down
common law approach to class gifts
if the gift or remainder to the deceased beneficiary has already
vested and there is no applicable statute, it will go to (a) whomever the instrument says it should go to if the beneficiary dies, or (b) whomever the deceased person has
specified in their will or through intestacy.
a child’s interest can pass to a spouse (or a residuary in her will)
Termination of a Trust
- Presumption of revocability:revocable unless stated otherwise
- Termination: may be terminated if all beneficiaeris are in existence all agree to termination. or if the benefiaries unanimously consent and there is no material purpose of the trust yet to be performed.
who is a remainderman?
Under the UPC, when a beneficiary does not survive to the distribution date, the beneficiary’s interest passes to his or her issue unless the trust instrument specifies an alternate disposition (this keeps the distribution in the family, eliminating the possibility that the class member could devise it to someone
else).
how is this different from common law- their share will fall into their estate, laws of intestacy dictate.
What are the Duties of a Turstee
- Duty of loyalty
- duty of care- prudent administration (invest prudently) (will be evaluated as a whole and not based on insolation of investment strategies.)
- Duty to diversify- must diversify intvestments but wont be responsible for market down turns from economic conditions.
what are powers of appointment?
1) Purpose: a person writing a will or trust can give his or her beneficiaries a power of appointment, which enables the beneficiary to **designate who will receive specific trust **or estate property.
when to excercise power of appointment?
Some powers are exercisable during the donee’s
lifetime. Others can be exercised only by the donee’s will.
How can the power of appointment be excercised?
if a donee can appoint trust assets (like the principal) outright, then the donee can also create more limited interests unless the donor intended otherwise.
types of powers of appointment
