Trusts Basics Flashcards
What is a trust?
Legal relationship in which property is vested in one person - trustee. Trustee under fiduciary obligation to hold property for benefit of another person/s - beneficiary.
Benefits of creating a trust?
- flexible/versatile legal instrument
- real subrogation
- ongoing
- protection
- speed and secrecy
Inter vivos vs mortis causa.
inter vivos - created in life and takes effect during truster’s lifetime
mortis causa - takes effect on truster’s death
Private trusts vs public trusts.
Uni of Edin v Torrie Trustees
private - specific individuals public - class of individuals, for public purpose
Uni of Edin v Torrie Trustees
- public trust is generally created for public or specified subset
Charity vs non-charity.
Further division of public trusts.
charity - regulated by CTI (S) Act 2005
Express vs implied.
express - expressly created
implied - involuntary created by law in certain circumstances e.g. constructive/resulting
Fixed vs discretionary.
fixed - indicate who will benefit discretionary - trustee decides who will benefit by indicating class of individuals
What is a truster-as-trustee trust?
- self-declared trust
- truster declares themself as trustee
- assets are transferred from general patrimony to trust patrimony
What is a bare trust?
- trusts for administration
- property is held by trustee for sole benefit of a beneficiary
- beneficiary can revoke at any time
- trustor is usually beneficiary
Who are the parties to a trust?
- truster
- trustee
- beneficiary
What is the dual patrimony theory?
Trustee has two patrimonies:
- private patrimony = totality of assets/liabilities
- trust patrimony = trust fund/obligations
4 ways trust can be created.
- expressly
- impliedly
- operation of law
- by statute
Features of a valid trust.
- valid trust must have a purpose
- defines role of trustee
- identify beneficiaries
- trustees must be aware of trust purpose
