trusts: revocable trusts as will substitute

Question 1

if the trust is serving as the substitute for the will, is it revocable or irrevocable

Answer 1

revocable

Question 2

are non probate will substitutes testamentary in nature?

Answer 2

no

Question 3

fulp v gilliard

We have a trust that’s revocable
The property is the farm
Ruth is primary beneficiary of trust and the trustee
She has all the control

Kids are beneficiaries when she dies
But she decides to sell the property
When ruth sells the property the kids complain – harold as the beneficiary in particular

Argue that she made a below market sale

Trustees can sell trust property, the proceeds would just become the new trust property

But kids argue it wasn’t a fair market sale and that as trustee she breached a fiduciary duty to the remainder beneficiaries by selling the farm that low

Does the trustee of a revocable trust owe a duty to remainder beneficiaries?

Answer 3

While the trust is revocable, the settlor has all the control, and where the trust serves as a will sub, the settlor and trustee are usually the same person

Question 4

how would the outcome be diffrent in the fulp case if it were a will (ie the one where she sold the farm at below market value and the kids argued she breached a fiduciary duty to them as beneficiaries)

Answer 4

If this were a will this wouldn’t really be an issue

Kids might argue its their inheritance and it would be an issue of ademption if this were a will

Question 5

what does the upc say about duties owed to the settlor in revocable trust

Answer 5

To the extent a trust is revocable [and the settlor has capacity to revoke the trust], the rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to, the settlor

Question 6

how do we know that a trust is revokable

Answer 6

UTC – the code PRESUMES REVOCABILTY unless otherwise stated – the lang must expressly relinquish the ablity to revoke

Based on presumption that most people want to retain the right to revoke

Question 7

how can a revokable trust be created via a deed of trust

Answer 7

by a deed of trust where the settlor transfers to the trustee the property to be held in trust

at the settlor’s death the trust property is distributed or held in further trust in accordance with the terms of the trust

the settlor is free to revoke the trust and take back the trust property

Question 8

how is a revokable trust created by a declration of trust

Answer 8

where the settlor declares himself to be trustee of certian propety for his own benefit during his life, with the remainder to pass at his death in accordance with the terms of his declaration

Question 9

why would anyone want an irrevocable trust

Answer 9

Tax reasons, creditor protection reasons

Question 10

what does a settlor have to do to exercise the right to revoke/amended

Answer 10

a revocable trust can be amended or revoked in any manner that clearly manifests the settlor’s intent to do so, unless the trust instrument specifies a particular method of amended or revocation and makes that method EXCLUSIVE

Question 11

patterson

In 1999, Darlene Patterson created the Darlene Patterson Family Protection Trust, reserving the right to amend or revoke it by written instrument delivered to the trustee. In 2006, she amended the trust to remove her son, Ron Patterson, as a beneficiary. Ron sued to invalidate the amendment, and the district court granted him partial summary judgment

Argues that she did not do what she needed to do to effectuate her intent to revoke his interest in the trust and wants to apply banks

Banks Held that strict compliance to process settlor disturbed in trust document

Answer 11

Under the Utah Uniform Trust Code, a settlor need not comply with the amendment requirements of a trust unless such terms are deemed the exclusive means for amendment.

Is what her trust doc says an exclusive method or permissible?

Not exclusive but that’s ok, we have two other ways – will/codicil or clear and convincing evidence

In the absence of a method of revocation in the trust document, most jurisdictions just look for clear and convincing evince

Question 12

draw out the utc method of revocation of trusts

Answer 12

check

Question 13

pena

the settlor of a revokable trust that requires amendments to be made by written instrument signed by the settlor makes handwritten changes to the trust instrument, affixes an explanatory stick note with a signature

are the handwritten changes plus the signed sticky notes enough to have amended the trust?

Answer 13

Sticky note not enough given that what trust document said about method of revocation
Example of a stricter court