Trusts - BM Outline Flashcards
Trust
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.
Key Characteristic of a Trust
Bifurcation of Ownership
Trustee = legal title
Beneficiaries = **equitable title **
Capacity Required to Make** Inter Vivos Irrevocable Trust**
contract capacity
Capacity Required to Make Inter Vivos Revocable Trust
testamentary capacity
lesser level of capacity than for contract
Capacity Required to Make Testamentary Trust
testamentary capacity
lesser level of capacity than for contract
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.
delivery
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 __________________________.
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
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
hand-to-hand delivery of the property (personal property only)
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
some item representing ownership, including a written deed (required for real property)
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 - _________________
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
8 Trustee Duties
(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