Trusts

Front 1

Express trusts

Back 1

Created by settlor on purposes, must be in writing

Front 2

Implied trusts

Back 2

1. Resulting trust--when an express trust fails
2. Constructive trust--to avoid unjust enrichment

Front 3

What capacity is required to create a trust

Back 3

1. Testamentary trust--capacity to make a will
2. Inter vivos--greater capacity to hold and transfer property

Front 4

How can an inter vivos trust be created

Back 4

1. Declaration of trust--settlor declares herfelf trustee
2. Deed of trust--settlro transfers property to 3rd party to serve as trustee

Front 5

Requirements for a valid trust

Back 5

1. Intent + a valid purpose
2. Trust property (res)
3. Indentifiable or ascertainable beneficiaries

Front 6

Can precatory language create a trust

Back 6

Only if there are extensive instructions showing the intent to create a trust

Front 7

What is the only acceptable forfeiture provision

Back 7

That a surviving spouse only get support until remarried

Front 8

What can be trust property

Back 8

Anything you have an identifiable property interest in (can be intangible)
--Can't be an expectancy
--value of the interest is irrelevant

Front 9

When can a promise to create a trust turn into a trust

Back 9

1. For gratuitous promises (no consideration), only if after all elements are met the settlor manifests an intent to create it
2. If supported by consideration, arises automatically when settlor gets the trust property

Front 10

Will a trust fail for lack of a trustee

Back 10

No unless the powers in the trust are so personal that only the person named in the trust may perform them

Front 11

Doctrine of Merger

Back 11

When the sole trustee is also the sole beneficiary title to the property is merged

Front 12

When must beneficiaries be ascertainable

Back 12

Only when payment is due to them, not at S's death

Front 13

What if a trust fails for want of ascertainable beneficiaries

Back 13

Court imposes a resulting trust that causes title to revert back to settlor or settlor's sii

Front 14

What is an honorary trust

Back 14

In favor of an animal
--Can't do this in GA but will be ok if nobody challenges
--no human bene, no life in being for RAP
--If trust fails, resulting trust imposed

Front 15

When is a trust revocable

Back 15

Only if it expressly reserves the power to amend or revoke

Front 16

Uniform Testamentary Additions to Trusts Acts

Back 16

Can add property to a trust through a will if the trust terms are identified in a writing that is executed before or concurrent with the will
(Pourover will)

Front 17

What is a Totten trust

Back 17

Bank account that someone deposits money in in trust for beneficiary
-revocable (can withdraw all money)
--Creditors can reach while depositor is alive and at death

Front 18

Does a trustee have discretion on whether to give $ to beneficiary

Back 18

Only if trust instrument says so
--creditors can get whatever beneficiary can get

Front 19

What is a spendthrift clause

Back 19

Protects the money from beneficiaries creditors (settlor cannot protect his own money this way)
--Completely protects from k claims

Front 20

What is the effect of a spendthrift clause if bene is disabled

Back 20

If bene is disabled mentally or physically, spendthrift clause protects thier interest completely

Front 21

What is a QUADRO

Back 21

Qualified domestic relations order--if spouse gets an interest in a retirement plan, can enforce the right even if plan has a spendthrift clause

Front 22

Who can be a bene of a charitable trust

Back 22

Must be members of the general public, not a private person
--Not subject to RAP
--enforceable by AG

Front 23

What is cy pres

Back 23

A doctrine that allows courts to fulfill a charitable purpose if the actual charity is gone
(cy pres = as near)

Front 24

What is equitable approximation

Back 24

A doctrine that will allow the court to deviate from the administrative terms of the trust if necessitated by changed circumstances

Front 25

When may the court terminate a trust

Back 25

1. High costs of administration are defeating the trust purposes
2. Trust purposes have been fulfilled or are impossible
3. Due to unanticipated circumstances continutation would defeat the trust purpose

Front 26

Can the beneficiaries terminate a trust

Back 26

If they are sui juris (of age and competent) if:
1. Termination is not contrary to the settlor's intent AND
2. There is no further trust purpose to be fulfilled

Front 27

Can a settlor ever terminate an irrevocable trust

Back 27

If all beneficiaries and the court consent

Front 28

What is a Purchase Money Resulting Trust

Back 28

Presumed to arise when consideration for purchase of property is paid by person other than the one that accpets title
--law presumes a gift if parties are married

Front 29

Who are the beneficiaries of a constructive trust

Back 29

The persons who would have been the beneficiaries absent the wrongdoing by the "trustee"

Front 30

What is a secret trust

Back 30

No mention of a trust at all
-If bene can prove fraud on the part of trusee, can get a constructive trust

Front 31

What is a semi-secret trust

Back 31

Will indicates a trust but beneficiaries are secret
-Trust fails
-resulting trsut in favor of S's sii

Front 32

Can a trustee resign?

Back 32

Yes with court permission

Front 33

What are the trustees duties

Back 33

1. Duty of loyalty--no self dealing
--commercial banks may use consolidated trust funds
2. Avoid conflicts of interest with beneficiaries
3. Annual accounting and annual distribution
4. Duty to use reasonable business judgment

Front 34

If a trustee is also a beneficiary when may she invade principal for herself

Back 34

If it is for her health, support, maintenance or education

Front 35

May a trustee delgate investment or management duties

Back 35

Only if she uses reasonable care, skill and caution in selecting the agent and in supervising his activities

Front 36

What is the standard of care for a trustee

Back 36

Prudent Trustee Standard
--the standard that would be observed by a prudent person dealing with the property of another acting in like capacity and familiar with such matters
--Duty to use speicial skills or expertise if possessed

Front 37

What are a trustees investment duties

Back 37

1. Don't speculate
2. Maintain marketability
3. Keep trust productive
4. Diversify as to industry not just company
5. Don't delegate without meeting standard
6. Don't commingle
7. Duty of impartiality

Front 38

May a provision in the trust relieve a trustee from liability for a breach

Back 38

Not if it is committed
1. Intentionally
2. In bad faith
3. With Reckless indifference

Front 39

What are the requirements for a valid gift

Back 39

1. Donor with donative intent
2. Delivery
3. Acceptance by the donee

Front 40

When is delivery of a gift accomplished

Back 40

When the donor relinquishes dominion and control over the property

Front 41

What are the types of gift delivery

Back 41

1. Actual
2. Constructive (car keys)
3. Symbolic (deed)

Front 42

Requirements for gift causa mortis

Back 42

1. Constructive delivery usually not allowed
2. Only for personal property
3. At least one W
4. If donor does not die, must give it back

Front 43

Will estate tax be imposed on the holder of a power of appointment

Back 43

Yes if it is a general power of appointment
To make it a special power by limiting his ability to appoint to himself, his estate, or the creditors of his estate or by limiting his ablilty to appoint to himself to the 4 ascertainable standards (health, support, maintenance, education)