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24 Cards in this Set

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(5) Elements Of An Express Trusts
(1) a settlor with capacity to convey; (2) a present intent to create a trust relationship (3)a competent trustee with duties (4)a definite beneficiary (5) the same person is not the sole trustee and sole beneficiary.
Explain: Settlor Must Have Capacity
The settlor's lack of legal capacity to convey prevents a trust arising and undue influnce, fraud, or duress may render the trust unenforceable.
Explain: Present Intention to Create a Trust
Intent may be by written or spoken words or by the conduct of the settlor--unless the Statute of Frauds applies.

An oral trust of personal property is valid Communication of intent to the beneficiaries is not necessary; delivery of the deedto the trustee is sufficient.
Trustee
one established, a trust will not fail because the trustee dies, refuses to accept appointment or resigns.
Acceptance of Trusteeship
A person accepts a trusteeship by: (i) substantially complying with the acceptance terms in the instrument; or (ii) accepting delievery of trust property, exercising powers or performing duties as trustee, or indicating acceptance.
Qualifications of Trustee
The settlor must intend to impose enforceable duties on the trustee. Minors and insane persons can hold property, but cannot administer. In Missouri, a nonresident bank or trust company can serve as a trustee it its state extends a similar privilege to Missouri Corporations.
Compensation and Reimbursement
A trustee is entitled to reasonable compensation or to compensation specified in the trust instrument. A trustee is entitled to expences connected to administration of the trust.
Removal of Trustee: Would continuation in office be detrimental to the trust?
Grounds for removal include: (i) a serious breech of trust (ii) lack of cooperation among co-trustees (iii) unfitness, unwillingness, or persistent failure to administer or (iv) a substantial change in circumstances.
Disclaimer or Resignation by Trustee
Before acceptance, a tustee can disclaim or refuse appointment for any reason. A trustee cannor disclaim in part and and accept in part.
Resignation by Trustee
Once an appointment has been accepted, the trustee can resign by either (i) giving 30 days notice to beneficiares, settlor (if living), and co-trustees; or (ii) obtaining court approval
Beneficiaries
A trust cannot exist without someone to enforce it. A beneficiary is necessary to the validity of every trust except charitable and honorary trusts.
Who can take as a beneficiary?
Any person, natural or artificial, capable of taking and holding title to property can be a benediciaty of a private trust?
Beneficiaries: Notice to and Acceptance
Notice to Beneficiariy is not esential to the validity of a trust. Acceptance, either express or implied, is required, but can take place after a valid trust is created.
Definiteness of Beneficiaries Under Private Trust
There must be definite beneficiaries in order to have a private trust (not required in charitable trust)
Definiteness of Beneficiaries Under Private Trust: Unascertained Beneficiares
Beneficiaries may be "definite" even though not yet ascertained. They must be ascertainable by the time their benefits are to come into enjoyment.
Definiteness of Beneficiaries Under Private Trust: Class Gifts
If a private trusts exists for the benefit of a class, the class must be reasonably definite. The trust may authorize the trustee to exercise his discretion in selecting members to be benefited, or may provide that only those who meet certain requirements will benefit.
Trust Property
Where there is no trust property, the trust fails because the trustee has no property to manage.
Trust Property Must Be Existing Interest In Existing Property
A future interest may be held in trust, but an interest not yet in legal existence cannot be held in trust.
Trust Property: Property that settlor has To Convey
The trust res must be existing property the the settlor has the power to convey, including intangibles
Debtor Cannot Hold Own Debt In trust
A debtor cannto hold his own debt in trust, but the debtor can declare himself tru
Trust Purposes: When Invalid
(i) illegal, (ii) contrary to public policy (iii) impossible to achieve, or (iv) intended to defraud the seelor's creditors or based on illegal consideration
Trust Purposes: Condition attached to interest is against public policy?
(a) The settlor's alternative desire controls if expressed. (b) If the illegal condition is a condition subsequent, the condition is invalidated but the trust is valid. (c) If the illegal condition condition is a condition precedent, the preferred view is to hold the interest valid unless there is evidence that the settlor's wish would be to void the beneficiaries' interest altogether if the condition is unenforceable.
Elements Of Valid Private Trust
(i) Settlor with capacity (ii)Present Intent to create a trust (manifested by settlor's words, writing or conduct) (iii) Trustee (inter vivos trusts only; a testamentary trust wil not fail forlackof a trustee) (iv) Definite Beneficiary (v) Trust property (vi) valid trust purpose)
Creation Of Express Trusts
A trust can be created by inter vivos transfer, by inter vivos declaration of trust, or by will (testamentary trust).