Week 8 Class Notes - Test 2 Flashcards
A living trust is a (1), (2) trust.
- revokable (can be cancelled, rescinded, invalidated at ANY TIME)
- intervivos (“between the living” - MADE and TAKES EFFECT while grantor is alive)
3 interchangeable terms for the one who establishes the living trust
- trustor
- grantor
- settlor
A trustee is a (1) or (2) who assumes (3) to the (4).
- person
- entity
- legal title
- trust property (everything held in trust)
5 terms for entirety of trust property
- corpus (most common)
- trust corpus
- trust res
- trust principal
- trust estate
A beneficiary is a (1) who holds (2) to the trust property.
- person
2. equitable title
When the testatory to a will dies, the will goes into effect (1), although (2)
- immediately
2. it may take awhile to transfer in probate
The grantor to a trust can determine (1) the property gets transferred, which helps with (2), in the sense that (3) and (4). However, trusts are much more (5) than wills.
- when
- asset protection
- creditors cannot reach the trust assets
- heirs must wait until a certain age
- expensive
Drafting a trust is very specialized, and it’s helpful to have a backgorund in (1). A trust pays taxes the way a (2) does. Estate taxes are exempt up to (3), and it’s important to know limits such as these. It also helps to have knowledge about (4).
- income tax
- corporation
- 5 million
- property tax
A trust is a (1) in which the (2) transfers specific property to the (3) who holds (4) to that property for the benefit of the (5) who hold (6).
- fiduciary relationship
- trustor
- trustee
- legaltitle
- beneficiary (ies)
- equitable title
A trust is a form of ownership of property which separates (1) and (2) of the property from (3). A trust requires this separation; without it, (for example, if the (4) and (5) are the same), then the titles (6) and there is no trust.
- control
- ownership
- benefit of ownership
- trustee
- beneficiary
- merge
Legal title is held by the (1). Another example of legal title is found in (2)
- trustee
2. seller loans (sellers holds title until paid off, otherwise can take back AND keep all payments as rent)
Equitable title is held by the (1) until the (2) is handed over by the trustee according to trust specifications, at which time the trust (3). Another example of equitable title is (4).
- beneficiary
- corpus
- terminates
- the buyer who is making payments and does not have legal title yet
The trustee holds “(1)” legal title, which means no creditors of the (2) can get at it.
- bare
2. trustee
To create a living trust, the trustor must (1)–in other words, there is no trust until there is a (2). The trustor does not get to (3) once the trust is in place.
- transfer property to the trustee
- corpus
- possess the property
5 requirements for a trust
- trustor
- trustee (if none exists, the courts will appoint)
- beneficiaries
- trust property
- trust purpose