Validity Flashcards
1
Q
Intent
A
- Settlor must intend to create a trust,
- with currently owned property
- Settlor must be 18+ and of sound mind
2
Q
Precatory Language
A
- “I hope/wish/desire”
- this language is not legally enforceable;
- EXCEPTION:
- Court will uphold precatory langauge if the settlor has a close, confidential relationship with trustee
- intended as a polite way to phrase an order or if there is a close, confidential relationship with the alleged trustee might explain why the settlor did not use more imperative language in creating the trust.
- EXCEPTION:
3
Q
What can be used as a corpus for a trust?
A
- Any existing, identifiable, and segregated property, real or personal, tangible, or intangible
- A mere expectancy cannot be used as corpus for a trust
4
Q
Future Interest
A
Can be an identifiable trust corpus
EXAMPLE: A dies leaving Blackacre to B for life, remainder to C. C declares herself trustee for D over her interest in Blackacre. There is a trust corpus.
5
Q
Debt
A
Can be trust corpus unless the trustee is also the debtor
6
Q
Ascertainable Beneficiaries
A
- Any person or entity who is capable of taking and holding title of property can be a beneficiary under a trust.
- Must be ascertainable at the time of distribution.
- Must be definite—or else too ambiguous
7
Q
Class Gift Problem
A
- If a class is too indefinite, it fails.
- A settlor can set up a trust where a trustee is to distribute to the person picked by the trustee from a group so long as it is an ascertainable, definable group
8
Q
Proper Purpose of a Trust
A
- Any purpose that is lawful and possible to achieve
- Remember: A charitable trust must be created expressly
9
Q
Mechanics for creating a trust
A
- A writing
- Delivery of specific trust property
10
Q
In Writing
A
- Oral trusts are unenforceable in PA
- A deed of trust is needed to transfer legal form settlor to trustee
- Statute of Frauds requires a writing for creation of a trust
11
Q
Delivery
A
- Declaration of Trust
- Deed of Trust
- A will
12
Q
Declaration of Trust
A
Settlor appoints himself as trustee for the benefit of another
If settlor is also beneficiary, he cannot be the ONLY trustee or ONLY beneficiary, otherwise bifurcation of title would cease
13
Q
Deed of Trustee
A
- A 3rd paryt is named as trustee
- Property is transfered to trustee
- If settlor designates a trustee that lacks capacity: This is not a fatal flaw. The court will appoint a replacement
14
Q
Testamentary Trust
A
- Trustee is named in the will
- Takes effect when testator dies
15
Q
Secret Trust
A
- Are valid
- Is a trust that cannot be discerned by the words of the will
- Extrinsic evidence does come in to establish the existence of the trust
