Types of Trusts

Question 1

Revocable & Irrevocable Trusts

Answer 1

Majority View - irrevocable by default UNLESS the trust states otherwise

Minority View/UTC - revocable by default UNLESS the trust states otherwise

Question 2

Irrevocable trusts CANNOT be:

Answer 2

Modified or Revoked (except in limited circumstances)

Question 3

Discretionary Trust

Answer 3

when the trustee has absolute discretion and power to determine when and how much of the trust property is distributed to the beneficiaries

exercise must be in good faith (court will interfere ONLY if trustee abuses their powers)

Question 4

Pour-Over Provision

Answer 4

when a WILL gifts property to a PREVIOUSLY established trust

does NOT create a trust

revocation or termination of trust before testator’s death causes gift to LAPSE

Question 5

Support Trust

Answer 5

a trust directing the trustee to pay the beneficiary as much income as is necessary for the beneficiary’s support

Question 6

Pure Support Trust

Answer 6

trustee has NO discretion in distributing trust income

Question 7

Discretionary Support Trust

Answer 7

trustee has discretion to distribute trust income (must comply with ascertainable standards; i.e., for a person’s health, education, support, or maintenance)

Question 8

Cy Pres Doctrine

Answer 8

a court may modify a CHARITABLE devise “as near as possible” with the settlor’s intent if the purpose of the trust/bequest is frustrated

applies ONLY when testator had a general charitable intent

Question 9

a __________________ is one in which the trustee is required to pay or apply so much of the trust as is necessary for the support of the beneficiary

Answer 9

Support Trust

Question 10

In a _____________ trust, the trustee does NOT have discretion to refuse to pay bills necessary for the beneficiary’s ____________.

Answer 10

Support/Support

Question 11

In a __________________, the trustee is given discretion whether to apply or withhold payment of trust property to the beneficiary.

Answer 11

Discretionary Trust

Question 12

The ______________ cannot interfere with the exercise of the trustee’s _________ unless the trustee abuses her power.

Answer 12

Beneficiary; discretion

Question 13

a court will NOT interfere with a ____________ trust unless the trustee has acted in bad faith or dishonestly.

Answer 13

Discretionary