Trusts Quiz 5 Flashcards
- S established an irrevocable inter vivos trust naming A as income beneficiary and B as principal beneficiary. T is the trustee. The trust is silent regarding the trustee’s obligation or discretion regarding the payment of income. Which of the following is correct?
c. Trustee must pay out the income every six months.
- D established a testamentary trust naming A and B as income beneficiaries and naming C as principal beneficiary. None of them is a forced heir. X is the trustee. Is the following provision enforceable?
“The trustee has the discretion to determine the time and frequency of each income beneficiary’s interest in the trust. The trustee may pay income to the income beneficiaries in unequal amounts.”
Yes
- D established a testamentary trust naming A as income beneficiary and B and C as principal beneficiaries. None of the parties are related to each other. The trust contained the following provision:“Term: This trust shall continue until the death of the last surviving beneficiary.”
A dies testate leaving his entire estate to X. How should income be paid out following A’s death?
b. ½ to B and ½ to C.
- D established a testamentary trust naming A and B as income beneficiaries and C as principal beneficiary. None of the parties are related to each other. The trust contained the following provision:“Term: This trust shall continue until the death of the last surviving beneficiary.”
A dies testate leaving his entire estate to X. How should income be paid out following A’s death?
b. All to B.
- D established a testamentary trust naming his children, A and B, as income beneficiaries. D named A’s child, C, and B’s child, D, as principal beneficiaries. The trust contained the following term:“Term: This trust shall continue until the death of the last surviving beneficiary.”
A died and named his spouse, X, as sole legatee. How should income be paid out following A’s death?
c. ½ to C, ½ to B.
- D established a testamentary trust with the following provisions:“Income Beneficiary: A is the income beneficiary for life.
Principal Beneficiaries: B is the principal beneficiary. But, if B dies without descendants before the termination of the trust, then C is the substitute principal beneficiary.”
A, B, and C were all in being when the trust was established. B’s will named X as his sole legatee. B died before A, without descendants. B was not D’s forced heir. Who is entitled to principal upon B’s death?
C
- D established a testamentary trust with the following provisions:“Income Beneficiary: A is the income beneficiary for life.
Principal Beneficiaries: B is the principal beneficiary. But, if B dies without descendants before the termination of the trust, then C is the substitute principal beneficiary.”
A, B, and C were all in being when the trust was established. B’s will named X as his sole legatee. B died before A, without descendants. B was D’s forced heir and his interest in the trust consisted solely of his legitime. Who is entitled to principal upon B’s death (assuming B had no forced heirs of his own)?
X
- D established a testamentary trust his spouse, S, as sole income beneficiary for life. D’s children, A, B, and C were named principal beneficiaries. C predeceased the decedent and was survived by C’s own child, X.
S, A, B, and X all survived the decedent.
Which of the following describes the principal interests of the trust?
b. 1/3 to A, 1/3 to B, 1/3 to X/
- D established a testamentary trust naming A as income beneficiary and B as principal beneficiary. Neither A nor B is a forced heir. Is the following provision enforceable?
“Trustee shall invade the principal of the trust and pay it to A when it is necessary for A’s health or education.”
Yes
- D established an irrevocable inter vivos trust naming A as income beneficiary and B as principal beneficiary. Neither is a forced heir. Is the following provision enforceable?“Trustee has the discretion to invade principal for the benefit of the income beneficiary whenever Trustee, in Trustee’s sole discretion, deems it advisable to do so.”
No
- S created a gratuitous irrevocable inter vivos trust for the benefit of A and B. When A learned about the trust, A promptly refused/renounced his interest in the trust. Which of the following is incorrect?
a. A’s creditors can accept on A’s behalf.
- B is the beneficiary of a testamentary trust. The trust is a spendthrift trust. B defaulted on her student loans. B’s student loan creditors and seize her interest in the trust to satisfy the debt. True or false?
False
- S established an irrevocable inter vivos trust for the benefit of A. A is the beneficiary of both income and principal. The trust requires income to be paid annually and gives the trustee discretion to invade principal for any reason. The trust is a spendthrift trust. After the trust was created and funded by S, A contributed $100,000 of his own money to the trust. A’s creditors want to seize collect on A’s debts. Which of the following is correct?
c. A’s creditors can seize the $100,000 A contributed to the trust.
- D died survived by one forced heir, F. D’s will placed F’s legitime in trust subject to the following terms and provisions:
- My girlfriend, G, is the income beneficiary of the trust.
- F is the principal beneficiary of the trust.
- This trust is a spendthrift trust.
Which of the provisions is an impermissible burden on F’s legitime?
1
- D died survived by two children (A and B), and a spouse, S. A is a forced heir. B is not. D left his entire estate (including A’s legitime) in trust. The trust contains the following provisions.
- S shall have a usufruct over the trust, for life or remarriage, whichever occurs first.
- Upon S’s death, A and B shall be entitled to the net income from the trust, in equal shares, at least annually.
- The trust shall continue until the death of the last surviving beneficiary.
Is the provision relating to S’s usufruct a permissible impingement on A’s legitime in trust?
Yes
