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62 Cards in this Set
- Front
- Back
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T or F:
A signature to a will may be any mark that the testator intends to be a signature |
True
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T or F:
Altering the terms of a will is most effectively done by clearly crossing out the old terms and writing in the new ones. |
False - The most effective way to alter the terms of a will is to prepare a Codicil.
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T or F:
An oral contract to provide for another by will is unenforceable in most states. |
True. Yet, a written contract is enforceable in most states to provide for another by will.
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T or F:
A person making a will must be of sound mind prior to the execution of the will. |
False. Capacity is a snapshot event in the law of wills. Only the mental ability at the time of execution is important.
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T or F:
A holographic will is an oral will. |
False. A holographic will is a handwritten will.
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T or F:
A person can have several domiciles but only one residence at any particular time. |
False. A person can have only one domicile, but as many residences as they want.
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T or F:
The courts in some states do not treat as binding the testator's wishes regarding funeral and burial arrangements. |
True. Instead, courts defer to the wishes of the surviving spouse or next of kin.
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T or F:
A document that is not yet in existence may be incorporated by reference in a will. |
False. Incorporating by reference may only be done if the other document is in existence at the time.
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T or F:
Since the executor is not required by law to pay the debts of the decedent, it is necessary to put a clause in the will instructing the executor to do so. |
False. The Executor is required by law to pay the debts of the decedent. Any instructions should be used with caution.
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T or F:
The main purpose of all family estate planning is to obtain the maximum benefits of principal and income for the family and to pass on the family property intact. |
True. So, does anyone have a rich uncle??
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A person who sets up a trust by providing money or property for it.
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Settlor (aka trustor, grantor, donor)
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A person who holds money or property for the benefit of another person
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Trustee
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A person who has right to the property, money and proceeds being managed by another.
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Beneficiary
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Money or property set aside in a trust or set aside for special purposes.
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Trust res (aka trust corpus, trust principal, trust property or trust fund)
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Any relationship between persons in which one person acts for another in a position of trust; for example, lawyer and client or parent and child.
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Fiduciary relationship
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Without a beneficiary, can a trust exist?
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No, but it is not necessary that a particular person be named.
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Full and absolute ownership without an equitable or beneficial interest.
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Legal title.
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Ownership of a beneficial interest, with legal title belonging to another. Also known as beneficial title.
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Equitable title.
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Trust created by a settlor's transfer of legal title to trust property to a trustee for the benefit of either the settlor or someone else.
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Conveyance in trust.
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A written statement by a person owning property that said property is held for another person. This is one way of setting up a trust.
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Declaration of trust.
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Oral; not in writing
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Parol
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A trust with terms stated in oral or written words.
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Express trusts.
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With complete free will; intentional.
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Voluntary trusts.
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A trust created in a will, which takes effect when the testator dies.
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Testamentary trust.
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A trust expressing a wish; it is advisory only and not legally binding in most situations.
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Precatory trust.
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An ordinary (regular or usual) trust as opposed to one created under a will upon death. Inter vivos for "between the living. Also known as an inter vivos trust.
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Living trust.
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Living trust in which the settlor retains the right to alter amend, or revoke the trust during the settlor's lifetime.
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Revocable living trust.
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Living trust that cannot be revoked or amended by the settlor once it has been established.
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Irrevocable Living trust.
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Provision in a will in which the testator leaves a gift to the trustee of an existing living trust.
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Pour-over trust.
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A trust that exists by analyzing surrounding circumstances or the action of person(s) involved; a trust known indirectly by the words of another person. Also known as "involuntary trusts."
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Implied trusts.
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A trust created by law (rather than by agreement) for reasons of fairness when one person holds property for another.
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Resulting trust.
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To establish a trust a person must be:
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competent and own the property that is to be placed in trust.
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Will the court allow a trust to fail for lack of a trustee?
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No.
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Who can be a trustee?
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Anyone who has the capacity to manage his or her own affairs.
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What kind of relationship do trustees have with the beneficiary?
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a fiduciary relationship
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Trustees must have a high degree of ?
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Honesty and good faith.
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Can there be a trust without a beneficiary?
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No.
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What are the requirements of the beneficiary?
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Must be capable of being identified and ascertained at all times.
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Must be the beneficiary be in existence when named in a trust?
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No.
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Can a sole beneficiary be a sole trustee?
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No, but a sole beneficiary may be a co-trustee with others
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What words are required to create an express trust?
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No particular words are necessary, just the intent to create a trust is essential.
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Can a trust be altered, amended or revoked?
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Only if the power to do so is expressed in the trust instrument.
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Why type of trust occurs when someone obtains legal title to property through fraud or other wrongdoing?
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Constructive trust.
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A person who spends money wildly and whose property the state may allow a trustee to look after.
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Spendthrift
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A trust set up for the protection of a person's property against himself, or creditor. These trusts are also set up privately through wills and trusts to enable one person to give money or property to another without fear that it will be squandered.
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Spendthrift trust
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A trust that gives income to many persons at different times. Also known as a spray trust or discretionary trust.
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Sprinkling trust
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Can people open bank accounts in their own names "in trust" for someone else, without signing any other trust instrument?
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Yes
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A savings bank account in the name of the depositor as trustee for another person.
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Totten trust.
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The amount of money a wife or husband can inherit from the other without paying estate or gift taxes.
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Marital deduction
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Trust designed to make optimal use of the federal tax marital deduction
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Marital deduction trust.
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Trust under which a deceased spouse's estate passes to a trust rather than to the surviving spouse, thereby reducing the possibility of the surviving spouse's estate being taxable. Also called an A-B trust, a bypass trust, or an exemption equivalent trust.
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Credit-shelter trust.
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Trust that gives all trust income to the surviving spouse for life, payable at least annually, and which meets the requirements of IRC Sec. 2056(b)(7).
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QTIP - Qualified Terminable Interest Property trust
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A trust set up for a public purpose such as to support a school, church, or charity. Also called a public trust.
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Charitable Trust.
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"As near as possible"
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cy pres
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A law preventing any attempt to control the disposition of your property by will that is meant to last longer than the life of a person alive when you die (or at least conceived by then) plus 21 years. Enacted in most states.
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Rule against perpetuties.
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Trust in which the settlor or a beneficiary retains the income from the trust for a period of time (usually for life), after which the trust principal is given to a charity.
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Charitable Remainder Trust
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Trust in which a fixed amount of income is given to a beneficiary at least annually, and the entire remainder is given to charity.
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Charitable Remainder Annuity Trust (CRAT)
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Trust in which a percentage - not less than five percent -- of the value of the trust property is determined annually and given to a beneficiary, with the entire remainder going to charity.
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Charitable Remainder Unitrust (CRUT)
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Powers that give trust beneficiaires the right to withdraw each year the money that is contributed to the trust.
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Crummey Powers.
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What is property passing to a surviving spouse?
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Marital deduction property, and is not taxable under federal estate tax laws.
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What type of trust gives income of the trust to the surviving spouse for life, tax free, payable annually, with the balance left intact for whomever the settlor designates
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QTIP trust.
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What type of trust may be used to pass money to heirs tax free if the trust contains Crummey Powers?
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A life insurance trust.
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