Wills and Trusts

Question 1

Trust elements

Answer 1

Settlor with capacity and present intent to create trust, delivery of specific trust property, ascertainable beneficiary, active duties imposed on trustee, proper trust purpose, and trustee.

Question 2

Trustee’s power

Answer 2

Settle or abandon trust claims, borrow money, sell or lease trust assets, incur reasonable expenses.

Question 3

Trust income v. principal

Answer 3

To income: Rents and cash dividends, ordinary expenses

To principal: Sales proceeds and stock dividends, extraordinary repairs

Question 4

Clafflin doctrine

Answer 4

After settlor’s death, trust cannot be terminated before time specified by settlor (even if beneficiaries agree) if material purpose of the trust has not yet been accomplished.

Question 5

Resulting trust

Answer 5

Arises when express trust makes incomplete disposition of assets or fails after property is convened to trustee. Equitable reversion to settlor in resulting trust.

Question 6

Constructive trust

Answer 6

Equitable remedy whereby trust is erected on holder of property to redress wrongdoing or prevent unjust enrichment.

Question 7

Purchase money resulting trust

Answer 7

If party pays for purchase price of property but directs that title to asset is placed in other’s name, there is a rebuttable presumption that grantee holds property in resulting trust for payor.

Question 9

Will requirements (general)

Answer 9

Testamentary capacity:

Donative intent: Intent to bequeath property, without undue influence (confidential relationship and suspicious circumstances)

Compliance with formalities: In writing, signed by two witnesses in reasonable time

Question 10

Elective share (spouse)

Answer 10

A spouse has the right to take an elective share rather than the portion of the estate set out in the will. This share is equal to 50% of the value of the marital property of the augmented estate, which consists of the decedent’s net probate estate, non-probate transfers to persons other than the surviving spouse, non-probate transfers to the surviving spouse, the value of the surviving spouse’s assets at decedent’s death plus non-probate transfers to others.