Trusts - Gretchen Flashcards
6 elements of a Private Express Trust
settlor, present intent, trustee, beneficiary, valid trust purpose, specific res
settlor requirements
“capacity to convey”; will be void for lack of capacity if undue influence (but for test), fraud, duress
test for undue influence
but for test
present intent
oral (but beware of statute of frauds or wills), writing, conduct by delivery or naming self trustee while settlor owned property that was delivered, with intent to take immediate effect, and NO precatory language
trustee
must be 18, competent capacity to enter into K, settlor must intend to impose enforceable duties
lack of trustee
trust does not fail; court can appoint a trustee
trustee removal
requested by settlor, beneficiary, or co-trustee: court will remove if “detrimental” to trust administration for 1-breach of trust, 2-lack of co-trustee cooperation, 3-unfitness, unwillingness or persistent failure to administer, 4-substantial change in circumstances
trustee resignation
must give 30 days notice to settlor, beneficiary, co-trustee(s), OR get court approval
sole trustee?
cannot be sole beneficiary, but okay if more than one beneficiary
trustee’s creditors
cannot touch trust assets
trustee pay?
entitled to reasonable fee and reimbursement for expenses
beneficiary requirements
must be “definite and ascertainable” (including class BENS), current BEN or “first line remainderman” by the time interests are to “come into enjoyment”
beneficiary misc.
presumed to accept unless affirmatively disclaimed; not required for charitable or honorary trusts; if trust fails for lack of a BEN-a resulting trust in favor of the settlor is created
specific property RES
no res=no trust; future interests are okay if existing K; intangible property that settlor has assignable interest is okay; res cannot be mere expectations, personal debt, unenforceable gratuities promises
REs when Real Property
statute of frauds applies; if not in writing, use constructive trust
Oral Trust for Personal Property
valid if established by clear and convincing evidence
INvalid trust purpose
invalid if its purpose is illegal, contrary to public policy, impossible to achieve, or intended to defraud settlor’s creditors or based on illegal consideration
Trust: if condition attached to interest is contrary to public policy
settlor’s alternative desire controls if expressed
Trust: if illegal condition subsequent
condition is invalidated, but remains valid
Trust: if illegal condition precedent
hold interest valid unless evidence of settlor’s desire to void entire interest if unenforceable
Rule Against Perpetuities for Trusts
Fl has a 360 year vesting period. a non-vested property is valid if 1-when the interest created is certain to vest or terminate w/n common law period of 21 yrs after the death of a life in being, or 2-it actually vests or terminates w/i 360 years. (if created prior to 12/31/00->90 yrs, not 360.
Creation of Express Trusts
1-inter vivos (during life transfer or declaration), 2-testamentary(at death, will)
Inter Vivos Transfer or Declaration
present intent manifested by conduct: delivery or naming self as trustee when trust property exists. (“I’m keeping my car for my nephew Q.”)
Testamentary Trust
must be ascertained from the will itself, incorporated by reference to will, have independent legal significance, or from exercise of a power of appointment created by the will. Must comply with the statute of wills (writing, 2 witnesses in presence of each other).
Secret Trust
constructive trust imposed for intended BEN if absolute gift made in will relied on BENS promise to hold property for another. Extrinsic evidence is permitted.
Semi-secret trust
Trustee holds resulting trust for settlor’s heirs where gift in will “in trust” but no BEN named. No extrinsic evidence permitted.
Charitable Trusts (differences from private trusts)
Indefinite beneficiaries, may be perpetual, and “cy pres” doctrine applies
charitable purpose
must benefit the public. (i.e. relief of poverty, education, religion, health, etc.)
Unascertainable beneficiaries (charitable trusts)
courts consider the community at large and a particular individual eligible for benefits to not have standing to enforce the terms. Enforcement is placed upon the state attorney general.
Cy Pres Doctrine
When a charitable purpose selected by the settlor is impractical, if the court finds that the STR had a general charitable purpose rather than a specific purpose to ONLY help the named charity, it can select an alternative charity to be the BEN. The alternative must be “as near as possible” to the STR’s intent.
RAP & Charitable trusts
RAP does not apply; can be perpetual.
