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35 Cards in this Set

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  • Back
trustee reqs
only applies to testamentary trustees, not lifetime trustees; cannot be infants, drunkards, felons, etc.; nor non-NY residents, unless related to decedent AND an NY resd serves as co-trustee
lawful purpose of trusts
trusts must have lawful purpose; look for total restraints on first mariage; in such case, child takes it free of condition and FREE of TRUST
unborn widow RAP save
NY will save a gift from RAP by assuming spouse refers to spouse in being
fertile octogenarian RAP save
NY assumes males < 14; f < 12 or > 55 are infertile; medical testimony is admissible; this can save gift from violating RAP b/c of remote chance of fertility
age contingency RAP save
NY will reduce age to 21 to save a gift (MBE won't)
RAP + Power of Appoitment
any PoApp is subject to RAP; so if given to someone who is a LIB at time the power is created, no problem; ???
spendthift exceptions
JANET - 10% levy to Judgment creditors; Alimony or child support; N- creditor who provides Necessitites; Excessss income beyond that needed for support & education; federal Tax liens
pour-over will
devises all of a portion of T's estate to a lifetime estate
life insurance trusts
trustees can be designated as beneficiaries of life ins policies; so this is a valid lifetime trust, even tho there is no res (stuff) until settlor dies (e.g. ins policy beneficiary is "the trustee of the trust created in my will")
charitable trust
must have charitable purpose; large class of *UNascertianable* beneficiaries; enforced by settlor or AG of every state (who MUST be joined & served); cy pres rule; no RAP
honorary trust
like a private express trust, but to non-humans (e.g. trust for upkeep of privately-owned woods); UNENFORCEABLE b/c trustees do not owe fiduciary duties to anyone; EXCEPT cemetaries and PETS for 21 years
revocation of revocable trusts
settlor may revoke in writing, signed and A or A or by settlor's will (default is irrevocable; revocabilility must be expressly reserved)
revocation of irrevocable trusts
only if ALL beneficaries in being consent; minors or incompetents can NOT consent, even thru guardians; but "trust to M then to my heirs" - heirs don't have to consent b/c they're not "in being"
remainder in grantor's heirs
C/L & MBE: grantor cannot create a remainder in his heirs, instead, gets a reversion ("O to M for life, then O's heirs" ---> O's heirs get nothing); NY - ABOLISHED
claflin doctrine
court can terminate a testamentary trust only if (a) ALL beneficiaries consent; (b) termination will not frustrate a MATERIAL purpose of trust; (c) will expressly states it is NOT a spendthrift trust
modification of trusts
equitable deviation - if compliance will frustrate its purpose;
invasion of trust principal
C/L - cannot; NY: ct may allow, in its discretion, if consistent w/primary purpose AND no remainder to charity
powers granted to trusteee
LEASE proeprty for up to 10 yrs; sell; mortgage; repairs; distribute from a minor to a parent up to $12k
powers prohibited to trustee
extraordinary repairs; employ agents or delegate authority; keep funds univested; pay debts barred by SoL
trustee's self-dealing
trustee owes an undivided duty of loyalty & fiduciary obligation to the trust & its beneficiaries; this means the trustee cannot represent the trust and her own interests in the same transaction; good faith or reasonableness is NO DEFENSE
trustee's duties
loyalty & fiduciary obligation; to make the property productive (prudent investor rule - not measured by hindsight); adjustment power (adjust investment return b/w income and principal)
liabilities of 3P to trust
if trustee borrows funds & invests & profits, the benefic can "trace it" and claim the proceeds; but conveyance to BFP cuts off benefic's title
SoL & trusts
SoL does not begin to run unless the trust relationship ends or trustee gives accounting which reveals wrongdoing
exculpatory clause in trust
testamentary trusts - removing liability for ordinary negligence is NOT valid; lifetime trusts - is valid, but will be strictly construed
trustee's personal liability on Ks
trustee is personally liable, if he signs "Ted, trustee of Trust" unless he signs "Ted, trustee and NOT individually" or if he signs "Trust, by ted, trustee"; BUT even if liable, he will be reimbursed by trust if acting properly
trustee's liability on torts
trustee is personally liable for ALL torts; but reimbursed if acting properly
purchase money resulting trust - NOT in NY; if A buys the property but takes title in B's name, in NY, B owns it in fee simple; but ct can impose a constructive trust to prevent unjust enrichment
splitting up joint bank accounts
deposit is a gift of 1/2; withdrawal of more than 1/2 w/o consent severs the joint tenancy and allows the other to recover her half; so if your wife is about to die, leave it be and you get the whole thing after death
convenience account
if it's a joint bank account for the ease of your agent, the principal has the BoP to show this
totten trust
not a real trust; beneficiary can't make any withdrawals; if beneficiary survives, he gets, EXCEPT claims by creditors and spouse's elective share; can be revoked by will and funds bequeathed to a whole nother person
UTMA accounts
uniform transfers to minors act; convenient wayto make gifts that avoid guardians and qualify for $12k per donnee annual tax exclusion
how to UTMA
transfer to "[custodian], as custodian for [minor child] under NY UTMA"; custodianship ends at 21 unless it sez 18; NOT a trust b/c custodian doesn't hold legal title;
creating private trusts
settler delivers legal title to the res (trust property) to a trustee for the benefit of named (and ascertainable) beneficiaries with the intent to create a trust that is evidenced by a writing which is signed by the settlor and trustee and acknowledge b/f notary or 2 Ws
spendthrift trust
protects a trust beneficiary's interest from *creditors* by prohibiting transfers of interests; ALL income interests in trusts have automatic protection; remainder interests are not protected; no self-settled sepndthrift trusts (so creditors can get income, but not principal)