Types of Trusts:

Question 1

Discretionary

Answer 1

T given sole and absolute discretion to determine how much to pay B. Must be expressly stated in terms of trust.

No voluntary or involuntary alienation.

Settlor (“S”) can trust for himself, but can’t with regard to involuntary alienation in order to deny creditors.

Question 2

Spendthrift

Answer 2

T’s signature forged or T given document that he believes isn’t testamentary → entire will invalid.

Question 3

Support

Answer 3

T required to use only so much income or principle as necessary for B’s health, support, maintenance or education.

Same rules as discretionary.

Question 4

Honorary

Answer 4

Trust has no ascertainable B and confers no substantial benefit to society, but rather a goal of S.

T isn’t required to carry out goal, but has the power to if he wants. If not, resulting trust is created.

Question 5

Constructive

Answer 5

Prevents fraud or unjust enrichment. Applies if self dealing, fraud, secret trust, or oral real estate trust.

Question 6

Oral Real Estate Trust

Answer 6

Deed handed to A for B.

A can’t invoke SoF if: (1) Fiduciary relationship between S and A; (2) fraud in inducement on A’s part; (3) detrimental reliance by B (e.g. takes possession and makes improvements) .

Question 7

Secret

Answer 7

Will on face gives gift outright to A, but T requires A to provide oral promise to use prop to benefit B.

Parol evidence is admitted to show T’s intent.

Question 8

Semi-Secret

Answer 8

Will makes a gift to a person to hold as a trustee, but names no beneficiary.

Court decrees a resulting trust; no parol evidence.

Question 9

Totten Trust

Answer 9

Tentative bank account trust naming B who takes whatever is left in account at death.

Question 10

Charitable Trust

Answer 10

Restatement: any trust that confers substantial benefit on society (e.g. help poor, advance education, help sick or promote religion).

Requires same as private express trust. No Rule Against Perpetuities.

If impossible or impracticable, court will use intrinsic and extrinsic evidence to ascertain S’s intent and determine cy pres, “as nearly as possible.”

Question 11

Resulting Trust

Answer 11

Implied in fact trust based on presumed intent of parties.

T transfers prop to S if alive, to S’s estate, or intestate takers.

Result if: (i) private express trust ends or fails for illegality or lack of B; (ii) charitable trust if cy pres isn’t an option; (iii) excess corpus; or (iv) purchase money resulting trust (X purchases and is intended B but title is in name of Y).