Trusts

Front 1

trustee reqs

Back 1

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

Front 2

lawful purpose of trusts

Back 2

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

Front 3

unborn widow RAP save

Back 3

NY will save a gift from RAP by assuming spouse refers to spouse in being

Front 4

fertile octogenarian RAP save

Back 4

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

Front 5

age contingency RAP save

Back 5

NY will reduce age to 21 to save a gift (MBE won't)

Front 6

RAPSA

Back 6

???

Front 7

RAP + Power of Appoitment

Back 7

any PoApp is subject to RAP; so if given to someone who is a LIB at time the power is created, no problem; ???

Front 8

spendthift exceptions

Back 8

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

Front 9

pour-over will

Back 9

devises all of a portion of T's estate to a lifetime estate

Front 10

life insurance trusts

Back 10

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")

Front 11

charitable trust

Back 11

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

Front 12

honorary trust

Back 12

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

Front 13

revocation of revocable trusts

Back 13

settlor may revoke in writing, signed and A or A or by settlor's will (default is irrevocable; revocabilility must be expressly reserved)

Front 14

revocation of irrevocable trusts

Back 14

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"

Front 15

remainder in grantor's heirs

Back 15

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

Front 16

claflin doctrine

Back 16

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

Front 17

modification of trusts

Back 17

equitable deviation - if compliance will frustrate its purpose;

Front 18

invasion of trust principal

Back 18

C/L - cannot; NY: ct may allow, in its discretion, if consistent w/primary purpose AND no remainder to charity

Front 19

powers granted to trusteee

Back 19

LEASE proeprty for up to 10 yrs; sell; mortgage; repairs; distribute from a minor to a parent up to $12k

Front 20

powers prohibited to trustee

Back 20

extraordinary repairs; employ agents or delegate authority; keep funds univested; pay debts barred by SoL

Front 21

trustee's self-dealing

Back 21

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

Front 22

trustee's duties

Back 22

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)

Front 23

liabilities of 3P to trust

Back 23

if trustee borrows funds & invests & profits, the benefic can "trace it" and claim the proceeds; but conveyance to BFP cuts off benefic's title

Front 24

SoL & trusts

Back 24

SoL does not begin to run unless the trust relationship ends or trustee gives accounting which reveals wrongdoing

Front 25

exculpatory clause in trust

Back 25

testamentary trusts - removing liability for ordinary negligence is NOT valid; lifetime trusts - is valid, but will be strictly construed

Front 26

trustee's personal liability on Ks

Back 26

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

Front 27

trustee's liability on torts

Back 27

trustee is personally liable for ALL torts; but reimbursed if acting properly

Front 28

PMRT

Back 28

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

Front 29

splitting up joint bank accounts

Back 29

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

Front 30

convenience account

Back 30

if it's a joint bank account for the ease of your agent, the principal has the BoP to show this

Front 31

totten trust

Back 31

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

Front 32

UTMA accounts

Back 32

uniform transfers to minors act; convenient wayto make gifts that avoid guardians and qualify for $12k per donnee annual tax exclusion

Front 33

how to UTMA

Back 33

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;

Front 34

creating private trusts

Back 34

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

Front 35

spendthrift trust

Back 35

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)