2015 - Mee - Trusts - Types Of Trusts

Front 1

What is the presumption of revocability of a trust in IL?

Back 1

Presumed irrevocable unless trust expressly states it is revokable.

Front 2

What is the presumption of revocability of a trust in MEE?

Back 2

No presumption of irrevocability

Front 3

What are the two main requirements of an Inter-Vivos Trust?

Back 3

1. Must be at least 1 beneficiary other than Settlor
2. Settlor cannot be Sole beneficiary AND sole trustee
   

Front 4

What is a Pour-Over Gift?

Back 4

Testamentary gift (gift made in a will) to an existing revocable trust.

Front 5

What are the two requirements for a valid Pour-Over Gift?

Back 5

1. Trust must be in existence (or executed concurrently with will); AND
2. Trust must be identified in the Will
   

Front 6

Can a Pour Over Gift be made to a trust not formed by Settlor?

Back 6

Yes

Front 7

Can a Pour Over Gift be made to an unfunded or partially funded trust?

Back 7

Yes

Front 8

What are the two ways an insured can make lifeinsurance proceeds payable to a trust?

Back 8

1. Insured can create an unfunded revocableinsurance trust and name the trusteeof the existing trust as policy beneficiary; OR
2. Have the trust be a testamentary trust and have the life insurance policy contract name “the trustee named in my will” as the life insurance policy beneficiary

Front 9

What is the additional way in Illinois an insured can make lifeinsurance proceeds payable to a trust?

Back 9

Direct insurance proceeds to atestamentary trustee, whether or not the will with the trust is in existence at the time of the designation pending the probating of the Will.

Front 10

What is required to create a Totten Trust?

Back 10

Open a bank account in depositors name "as trustee for" a named benificiary

Front 11

What are the two effects of a Totten Trust?

Back 11

1. Depositor may make deposit and withdrawals during depositors lifetime;
2. Upon death of Depositor remainder of account goes to beneficiary.
   

Front 12

What are the four ways to revoke a Totten Trust?

Back 12

1. Withdraw all the money in the account
2. Manifest intention to revoke during lifetime
3. Revoke in a will
4. Death of beneficiary before depositor
   

Front 13

What happens when the beneficiary dies before the depositor in a Totten Trust?

Back 13

Trust is revoked and all the money in the account goes free and clear to depositor.

Front 14

What is required to change the beneficiary in a Totten Trust?

Back 14

Notarized statement sent to the financial institution,naming the old beneficiary and the new one.

Front 15

When can creditors of depositor reach funds in a Totten Trust?

Back 15

Before or after depositor's death.

Front 16

What is required to form a Joint Account?

Back 16

Mention of right of survivor ship

Front 17

What is required to defeat the survivorship in a joint account?

Back 17

If clear and convincing evidence showsthat a survivorship was not intended when the account was established and that the account was opened only as a matter of convenience to the depositor.

Front 18

How is ownership split up in a Joint Account?

Back 18

• Each party owns 1/2 while both parties are alive (regardless of how much each party puts in) AND
• All funds go to surviving party
  

Front 19

What are the three benefits of a Uniform Transfer to Minors Act (UTMA)?

Back 19

1. Avoids guardianship proceedings
2. Avoids a Trust
3. 14K tax exemption
   

Front 20

What are the two requirements to make an UTMA?

Back 20

1. Made to custodian
2. Specify made under UTMA
   

Front 21

Can UTMA gifts be made in a will?

Back 21

Yes, as long as statutory language is used.

Front 22

What are the three duties of an UTMA custodian?

Back 22

1. Hold, manage and invest the property undera prudent person standard
2. Pay over to the Minor or for theminor’s needs what part of the property that the Custodian deems advisable; AND
3. Pay what is left of the property to the minorwhen the minor turns 21.

Front 23

What are the three requirements for a Charitable Trust?

Back 23

1. Indefinite beneficiaries (can't be specifically named)
   
2. Reasonably large group of beneficiaries
3. For a charitable purpose
   

Front 24

Can Charitable Trusts be perpetual?

Back 24

Yes

Front 25

When can a Charitable Trust be changed?

Back 25

Cy Pres doctrine

1. If the stated purpose of the charitable trust can no longer be accomplished, or the designated charity goes out of existence,
   
2. the court may use this tomake the trust be as near aspossible to what the settlor wanted.

Front 26

What two rights does the AG have in relation to a Charitable Trust?

Back 26

1. Indispensable Party
2. Standing to sue to enforce
   

Front 27

What is an Honorary Trust?

Back 27

Where no human being is the beneficiary of a private (i.e., non-charitable) trust.

Front 28

What is a cemetary trust?

Back 28

• Trust for perpetual care and maintenance for burial plots.
• Ok in Illinois
  

Front 29

What is a Constructive Trust?

Back 29

Is just a flexible equitable remedy designed todisgorge unjust enrichment that resultsfrom wrongful conduct

Front 30

What is the trustee's only duty in a Constructive Trust?

Back 30

To convey the property tothe person who, in equity, should have the property.

Front 31

What is a Resulting Trust and the two times it arises?

Back 31

• is not a trust but is an equitable remedy

1. Express trust fails; or
2. When a Purchase Money Resulting Trust (PMRT)
   

Front 32

When is a Purchase Money Resulting Trust (PMRT) formed?

Back 32

1. A purchaser buys property,
   
2. but has title put in someone else's name (who is not a relative);
   
3. later, purchaser claims no gift was intended and asks title holder for title to theproperty and
4. the title holder refused to return the property.

Front 33

What is the effect of a PMRT?

Back 33

Purchaser can compel title holder to give up title to the property

Front 34

What is the Spendthrift Rule?

Back 34

Protects a trust beneficiary’s interest from creditorsby prohibiting voluntary OR involuntary transfer of the beneficiary's interest

Front 35

What is required to provide spendthrift protection?

Back 35

spendthrift clause must be expressly stated in the trust.

Front 36

What are the four exceptions to a spendthrift clause?

Back 36

1. Creditors who furnish necessities
2. Child support and alimony
3. Federal tax liens
4. Self-Settled Trust Rule
   

Front 37

What is the self-settled trust rule?

Back 37

Spendthrift protection does not apply to any interestretained by the Settlor

Front 38

When are the two times creditors reach trust assets?

Back 38

1. Revocable trusts
2. Settlor's interest in irrevocable trust