Trusts - Revocable Trust; Bank Account Arrangements/Charitable Trusts/Constructive Trusts Flashcards
Can a Settlor revoke a trust if trust is silent on whether Settlor retained this power?
A Settlor CANNOT REVOKE if Created BEFORE July 8, 2012.
A Settlor CAN revoke if created on or after 07/08/12.
What is a self-declaration of trust?
Settlor names himself as trustee. Retains a trustee income for life and power to revoke.
Trust is valid as long as settlor is not the sole beneficiary or if the sole beneficiary is not the sole trustee.
What is a “pourover will”?
Bequest to an intervivos trust. Provides a means for adding testamentary assets to a trust created by T during lifetime.
Testamentary gift is VALID:
I1) even if trust is subject to revocation and even if unfunded during lifetime.
Trust need not be in existence before or executed concurrently with the will; can be created after the will is signed.
Can a creditor reach the assets in the revocable trust?
Yes, but only if probate asset is exhausted. Creditor must first file suit against executor.
What is the time limit on contesting revocable trust after settlor’s death?
A proceeding to contest the validity of a revocable trust must be filed by a person within the earlier of (i) one year after the settlor’s death or (ii) 60 days after the trustee gives the person written notice of the trust’s exists, a copy of the trust instrument, and the trustee’s name and address.
Four Distinctive Rules Apply to Charitable Trusts
(1) Not subject to RAP, can be perpetual
(2) Must be for a charitable purpose. Must confer a substantial amount of social benefit.
(3) Must be in favor of a reasonably large number of unindentifiable members of the public at large, and cannot benefit identifiable individuals.
(4) When the stated charitable purpose can no longer be accomplished, it MUST be reformed in judicial proceeding under the doctrine of cy pres.
* In MA- there is a conclusive presumption that the settlor had a general charitable intent, meaning that cy pres always must be applied.
- If original purpose, impossible or improbable, court must select an alternative as close as possible to primary purpose.
Court may reduce amount of property left in trust if it determines that the amount is far in excess of amount needed for the intended use.
Liability of charitable trust’s assets for injury caused by trustee is limited to $20,000.
What is a constructive trust is not a trust?
Name given to an equitable remedy designed to disgorge unjust enrichment where there is:
(1) wrongful conduct
(2) Unjust enrichment.
Create a constructive trust to fulfill testor’s will.
