E3 // Fltrusts F12

Front 1

Inter Vivos Trust Requirements:

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1. the intent to establish a trust
2. delivery of the subject matter of the trust with the intent to pass title ot the trustee

Front 2

Oral Trusts validity?

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Valid for PERSONAL PROPERTY
Invalid for REAL PROPERTY (Statute of frauds)

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Inter Vivos Trust Revocability?

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THe settlor may revoke or amend the trust unless the terms of the trust expressly provide that the trust is irrevocable

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Gift Cuasa Mortis

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A gift made in fear of impending death, which is automatically revoked if the donor survives the aprehended peril

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Trustee Self-Dealing

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Against Public policy and is prohibited
The beneficiary will want to RATIFY an improper act by the fiduciary.
Also petition the trustee to be removed

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Exculpatory clauses

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Can be used to relieve from liability of ordinary negligence, but will be construed narrowly

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Charitable Trust Lifetime

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Charitable trusts can be perpetual and are not subject to the rule against perpetutities (360 years in Florida).

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Terminating an irrevocable trust?

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Trust beneficiaries can terminate an irrevocable trust prior to the time fixed for its termination if
1. all beneficiaries, all of whom must have capacity, must give consent
2. there is no further trust purpose of the settlor to be served

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Co-Trustee Liabilities

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Generally a Co-trustee is not liable for a breach of trust committed by another trustee, unless co-trustee participated or acquiesces in the breach of trust, or negligently disgregard own dutites (fails to participate in trust administration)

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Valid Express Trust Requirements?

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1. settlor with capacity to convey
2. clear and unequivocal present intent to create a present trust relationship
3. competent trustee with duties
4. definite benefiaries
5. same person may not be the sole trustee and sole beneficiary

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Valid Express Trust Requirements (others)

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1. present and unequivocal disposition in trust of specific property (then owned by settlor)
2. Trust must have a valid trust purpose

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Inter vivos trust creation

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Can be created by a declaration of trust by a property owner, stating that heholds the property as trustee in trust
OR
by transfer of property by settlor during his lifetime

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benficiaries rule

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Private trust requires that there be definite beneficiaries (or at least that the beneficiaries will be ascertainable within the peroid when all interests must vest under the rule against perpetutities (360 years))

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Killing Rule General

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A person who unlawrfully and intentionally kills or participates in procuring the death of the decedent is not entitled to any benefits under the decedents will, by intestacy or as a beneficiary of life insurance policy on the decedents death

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Killing Rule Trusts

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a trust beneficiary who unlawfully and intentionally kills or participates in procuring the death of a settlor or another person whose deatht he beneficiary's interest depends is nto tentitled to any trust interest depdendent upon the victims death

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Killer's share

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Interest devolves as though the killer predeceased the victim

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Killer requirements

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Final judgment of conviction of murder in any degree is conclusive evidence that killing was unlawful and unintentional

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Trust Termination Generally

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Trust will terminate at the end of the trusts life if given (ie 10 years)

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Trust Termination by Court upon petition of trustee or qualified beneficiary

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1. termination is not inconsistent with settlors purpose
2. termination is otherwise best interest of beneficiaries
3. continuation of trust would be uneconomical

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Settlor as trustee

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Florida, an otherwise valid inter vivos trust does not become invalid because the settlor retains any one or more of the following powers
1. power to revoke
2. alter, amend, or modify trust instrument
3. power to appoint the income or principle by will or deed
4. power to add or to withdraw from trust
5. power to remove trustees and appoint new ones
6. to act as or to become the sole trustee either at time of execution or thereafter

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Trustee NO MORE what happens?

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Once a trust is established it will not fail merely because of the trustee's death, incapacity, resignation, or removal)

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Trustee Duties

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Duty to preserve trust property and make it productive

Front 23

Self-dealing transactions voidable unless

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1. transaction was authorized by terms of trust or approved by court
2. beneficiary failed to bring suit within prescribed time
3. B's consented to T's conduct, ratified the transaction or released T
4. transaction involves a contract entered into or claim acquired before T became T
5. consented to in writing by S while the trust was revocable
6. transaction was one by corporate T that involves a money market mutual fund, mutual fund or common trust fund

Front 24

Order of Trustee Appointment

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1. person designated in the trust instrument
2. person appointed by unanamous agmt by qualified B
3. person or corporate fidicuiary appointed by Court

Front 25

Creditor Claims - Generally

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FL has a special short statute of limitations that applies to claims against a decedent's estate

its purpose is to permit an expeditious winding up of the decedent's affairs so that the estate can be distributed to the will beneficiaries or heirs without concern for the later assertion of creditors' claims

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Creditor Claims - Order of Payment (8)

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In insolvent cases, assets are paid to creditors in the following order of CLASSES:
(1) costs, expenses of administration, compensation of PR and their attorneys, and attorneys' fees awarded from the estate
(2) reasonable funeral, interment and grave marker expenses not to exceed $6,000
(3) debts and taxes with preference under federal law, and Medicaid claims
(4) reasonable and necessary medical and hospital expenses of the last 60 days of teh last illness of the decedent
(5) family allowance
(6) arrearage from court-ordered child support
(7) debts acquired after death by the continuation of teh decedent's business (but only to the extent of the assets of that business)
(8) all other claims, including those founded on judgments rendered against the decedent during his lifetime and any excess over the sums allowed for funeral expenses and expenses of last illness under #2 and #4

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Abatement Order - Generally

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when no provision is made by the decedent regarding payment of claims, or when the assets of teh estate aren't sufficient to pay all of the deceased's debts and also satisfy all of the specific and general legacies in the will, FL law provides an abatement order to determine which legacies must be sacrificed 1st to pay the decedent's debts and expenses of administration

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Abatement Order - List/Order

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(1) property passing by intestacy
(2) residuary devises and bequests
(3) general legacies
(4) property not specifically or demonstratively devised
(5) specific and demonstrative legacies

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An inter vivos express private trust is valid even though the Settlor retains the right to:

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1) RAAM: Revoke - Alter - Amend - Modify trust instrument;
2) Control trust investments;
3) Remove Ts / Appoint new ones.

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Express Inter Vivos Trust - "Testamentary" Aspects

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INVALID - Unless the trust is executed with the formalities required for the execution of a will under the Statute of Wills (SoW).

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Trustee Duties - Duty to Make Productive

Duty / Breach (FL Statute)

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In FL, the statute looks to the entire trust corpus, not each individual asset to determine whether the trust is productive.

The trustee must strike a balance b/t income Bs and remaindermen; i.e., investments must be "fair" to both classes of Bs.

An investment policy of overinvesting any particular type of investment or retaining a particular asset regardless of its income production could be breach of trust.

However, the settlor can authorize the retention of, or investment in, assets w/o regard to their income.