wills, trusts, & estates

Question 1

are rents and cash dividends allocated to trust income or trust principal?

Answer 1

trust income

Question 2

are sales proceeds and stock dividends allocated to trust income or trust principal?

Answer 2

trust principal

Question 3

when does a remainder class for a trust close?

Answer 3

• no outstanding income interest +
• at least one member of the class is entitled to demand possession of share of remainder

Question 4

rule of convenience

Answer 4

person must be born before period of distribution in order to share in a class gift

Question 5

when can a gift disclaimer be made under common law? (trusts)

Answer 5

any time

Question 6

what happens if a life estate is renounced, wrt to subsequent interests

Answer 6

it accelerates the interest possession of subsequent interests, so long as vested

Question 7

what can a trustee do with trust when a beneficiary invalidly disclaims (i.e., statute doesn’t allow) and there is no vested remainderman

Answer 7

choices:
1. distribute income from trust to heirs of T under theory of partial intestacy
2. accumulate income and then distribute in future to ultimate beneficiaries of principal
3. distribute income to those who would be beneficiaries when the trust terminates