Trusts - BM Outline Flashcards

1
Q

Trust

A

A trust is a legal arrangement in which a settlor (the creator of the trust) conveys property (the “trust corpus” or “res”) to a trustee to hold as a fiduciary for one or more beneficiaries or for a charitable purpose.

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2
Q

Key Characteristic of a Trust

A

Bifurcation of Ownership

Trustee = legal title
Beneficiaries = **equitable title **

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3
Q

Capacity Required to Make** Inter Vivos Irrevocable Trust**

A

contract capacity

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4
Q

Capacity Required to Make Inter Vivos Revocable Trust

A

testamentary capacity

lesser level of capacity than for contract

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5
Q

Capacity Required to Make Testamentary Trust

A

testamentary capacity

lesser level of capacity than for contract

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6
Q

Unless a declaration of trust, in which the settlor is trustee, there must be a ____________ of the trust corpus to the trustee. _____________ of the property can be actual, symbolic, or constructive.

A

delivery

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7
Q

Unless a declaration of trust, in which the settlor is trustee, there must be a delivery of the trust corpus to the trustee. Delivery of the property can be __________________________.

A

actual, symbolic, or constructive

Actual = hand-to-hand delivery of the property (personal property only)

Symbolic = some item representing ownership, including a written deed (required for real property)

Constructive - presenting the means to access the property (or doing everything reasonably possible to put the trustee in possession), such as giving the trustee a key

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8
Q

There must be a delivery of a valid presently existing interest in property to the trustee. Delivery can be:

Actual = _________________

Symbolic = some item representing ownership, including a written deed (required for real property)

Constructive - presenting the means to access the property (or doing everything reasonably possible to put the trustee in possession), such as giving the trustee a key

A

hand-to-hand delivery of the property (personal property only)

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9
Q

There must be a delivery of a valid presently existing interest in property to the trustee. Delivery can be:

Actual = hand-to-hand delivery of the property (personal property only)

Symbolic = ______________________

Constructive - presenting the means to access the property (or doing everything reasonably possible to put the trustee in possession), such as giving the trustee a key

A

some item representing ownership, including a written deed (required for real property)

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10
Q

There must be a delivery of a valid presently existing interest in property to the trustee. Delivery can be:

Actual = hand-to-hand delivery of the property (personal property only)

Symbolic = some item representing ownership, including a written deed (required for real property)

Constructive - _________________

A

presenting the means to access the property (or doing everything reasonably possible to put the trustee in possession), such as giving the trustee a key

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11
Q

8 Trustee Duties

A

(1) Duty of Loyalty — administer trust solely for the benefit of beneficiaries
(2) Duty of Prudence — exercise care, skill & caution of prudent person
(3) Prudent Investor Rule — UPIA, informed decisions, productive investments, diversify
(4) Duty of Prudent Delegation — prudent under circumstances; reasonable care, skill & caution in selecting, instructing, & monitoring agent
(5) Duty of Impartiality — due regard to beneficiaries’ various interests
(6) Duty to Disclose — keep accounts, periodic reports & accountings, give information reasonably necessary, respond promptly to requests for info
(7) Duty not to Commingle Trust Property - separate trust assets from own assets
(8) Duty to Earmark Trust Property — designate as trust property

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