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15 Cards in this Set
- Front
- Back
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What is an express trust?
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Fiduciary relationship wherein trustee holds legal title for beneficiary, who holds equitable title.
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Elements of an express trust
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Capacity TRIB
1. Settlor must have capacity 2. Trust purpose 3. Res 4. Intent 5. Beneficiaries |
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Is a writing necessary for a trust?
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Yes: Realty, and Testamentary (to satisfy statute of wills)
No: Personalty - oral trusts are OK |
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What can the trust purpose be?
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Anything legal (support, conserve assets, save taxes) BUT not against pub policy (destruction, divorce)
If purpose bad, consider intent. If Settlor would have wanted trust w/out it, strike provision. If not, void the trust. |
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What is a resulting trust?
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One that is implied, arises from conduct. NEVER A S of F BAR!
Arises from: - Purchase money - failure of express trust - failure of charitable or honorary trust |
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What is a constructive trust?
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Arises from the law. A remedy!
Where one acquires title by conversion, fraud, or unconscionably. The sole duty imposed on a constructive trustee is to convey. |
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IL automatic spendthrift provision
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In IL, where settlor is not the beneficiary, automatic spendthrift provision! Beneficiary can't convey, and creditor can't attach! Exception: court ordered alimony or child support
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Discretionary transfers of interest
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settlor gives discretion to trustee to pay the life bene not only the income, but also the corpus (principal). Once discretion is exercised, benes can enforce and creditors can attach.
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Length of trust - presumption
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presumption is that they're irrevocable.
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Can you revoke an irrevocable trust?
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Settlor alive - if trustee, settlor, and all benes agree, irrev trust can be revoked
Settlor dead - gen, if all other parties agree, and no trust purpose would be thwarted, then irrev trusts can be revoked. BUT: IL, statutory spendthrift purpose would be thwarted (settlor, if dead, is thus not one of the bens, and the IL auto spendthrift provision kicks in.) So, in IL, you can't revoke an irrev trust if the settlor is dead. |
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Cy pres doctrine
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If charity doesn't exist at the time of funding, you can 1) give to the next closest charity, if general intent, or 2) the resulting trust will go to benes and heirs
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Honorary trust
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Beneficiary is NOT a charity, nor private (basically, cemetery lots and pets).
Technically void. Upheld if trustee willing, and trustee is always willing!!! |
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Investment standard for administration - IIT LAW
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IIT LAW
Income and safety Inflation Taxes Liquidity and diversification Aappreciation Will bene have other resources? |
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Duties of trustee (SAIL)
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1. Separate assets - no comingling
2. Accounting - keep records, pay over promptly 3. Impartiality - to all benes 4. Loyalty - can't do biz w/ the trust - if you do, trust gets to keep the better w/out the bidder! |
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Uniform Principal and Income Act - what goes to corpus and what is income?
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Principal (corpus) - stock dividends/splits, proceeds from sale
Income - (RIC) rent, interest, cash dividends, |
