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16 Cards in this Set
- Front
- Back
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There are three kinds of trusts, name them
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Express, Implied (Remaining), and Constructive
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How does one make an express trust?
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Settlor, with capacity, must put his TRIB in writing, if necessary.
T=Trust purpose, R=Res, I=Intent, B=Beneficiary |
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What happens to a trust if the purpose is bad (ie. violates public policy)?
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Void the trust
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Is "my friends" a valid beneficiary on an express trust?
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NO dumbass, it needs to be identifiable - would pass to residuary or descendants in implied trust
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How is an implied trust made?
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Failure of express trust, Failure of charitable/honorable trust, or purchase money for title in another's name
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If you gift an item to someone you aren't related to, what is the presumption?
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That they are the trustee for the property for the benefit of you and your heirs
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What is the AUTOMATIC SPENDTHRIFT PROVISION in Illinois?
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Refers to the transfer of an interest/corpus: Beneficiary can’t convey and Creditor can’t attach - Except: Court ordered alimony or child support
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If settlor gives trustee the discretion to pay life beneficiary not only interest, but corpus - what happens?
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Before exercised: it can’t be reached by beneficiary (or by his creditors). After exercised: beneficiary can enforce and creditors can attach
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Under what circumstances can a beneficiary force distribution of the corpus?
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If he shows the trustee acted in bad faith or in violation of duty.
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Are trusts presumed to be revocable or irrevocable?
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Irrevocable Stupid
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How can an irrevocable trust be revoked?
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If settlor is alive: all parties agree, then it can be revoked. If settlor is dead: all remaining parties agree and it WON'T thwart purpose of trust, do it. EXCEPT: In IL, if settlor is dead, the automatic spendthrift provision doesn't allow revocation.
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What happens if a charity is extinct at the time of funding?
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Issue: Cy Pres
If settlor had a "general charitable intent", then it goes to next closes charity. If no "GCI", then it goes to descendants/heirs. |
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What is the investment standard for a trust (absent a standard in the trust itself)?
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"Prudent Investment Rule" - IITLAW [Income and Safety, Inflation, Taxes, Liquidity & Diversification, Appreciation, Will beneficiary have other resources?]
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What are the duties of a trustee?
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Basic: Protect trust and follow instructions.
As well: SAIL [Segregation of assets, Accounting, Impartiality, Loyalty] |
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What is the liability of a trustee?
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Unlike an agent, a trustee is PERSONALLY LIABLE!
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What is deemed principal and income?
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Principal: What goes to life beneficiaries - stock splits/dividends.
Income: What goes to trust beneficiary - RIC [Rent, Income (interest), Cash dividends (also merchandise dividends). |
