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64 Cards in this Set
- Front
- Back
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Duty of a Trustee: A
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Administer the Trust
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Duty of a Trustee: O
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Of Loyalty
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Duty of a Trustee: K
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Keep and render accounts
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Duty of a Trustee: F
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Furnish Information
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Duty of a Trustee: N
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Not to delegate
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Duty of a Trustee: E1
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Exercise Reasonable Care and Skill
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Duty of a Trustee: T
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Take and Keep Control
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Duty of a Trustee: P1
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Preserve the Trust Property
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Duty of a Trustee: E2
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Enforce Claims
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Duty of a Trustee: D1
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Defend Actions
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Duty of a Trustee: K2
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Keep property separate
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Duty of a Trustee: W2
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With respect to bank deposits
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Duty of a Trustee: M
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Make the property productive
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Duty of a Trustee: P2
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Pay Income to Beneficiaries
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Duty of a Trustee: D2
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Deal impartially with beneficiaries
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Duty of a Trustee: W2
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With respect to cotrustees
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Duty of a Trustee: W3
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With respect to person holding power of control.
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Two qualifications: Extent of Trustees' Powers:
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1.)Only can be: Conferred by specific terms in the document (explicitly listed, or by reference.)
2.) Must be necessary to carry out the the purposes of the trust |
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Power of a Trustee: E
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Extent of Powers
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Power of a Trustee: C
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Control of Powers
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Power of a Trustee: I
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Incur Expenses
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Power of a Trustee: L
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Lease property
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Power of a Trustee: S
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Sell property
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Power of a Trustee: M
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Mortgage, Pledge or Borrow property
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Power of a Trustee: C
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Compromise, arbitrate, or abandon claims.
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Power of a Trustee: V
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Vote share of Stock
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Power of a Trustee: S
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Several trustees - the powers conferred upon them can only be exercised upon all trustees - If you are outnumbered by 2-1, then you need to write and file an objection, otherwise you are liable for that decision, and your agreement is implied.
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Power of a Trustee: S2
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Surviving Trustees - If one dies or is removed, the power passes to the remaining trustees.
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Power of a Trustee: S3
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Successor Trustees - The powers conferred on a trustee can be exercised by his successors, unless the trust states otherwise.
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Dispositive alternatives: Personal Property
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Outright legacies or Trust. With regard to outright legacy, could be left to use of
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Dispositive alternatives: Real Property
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1.) Outright devices
2.) Life estates or other alternative estates, or interests with remainder over. 3.) Trusts |
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Reasons for Trust to a Family Unit:
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1.) Preservation of the Family Home
2.)Release of the Mother from business and financial responsibilities. 3.)Supply necessary family income. 4.) Make special provisions for children. |
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7 reasons for leaving property in trust, to individuals: PMS IM EP
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1.) Physical capacity - lack of physical capacity to manage the property.
2.) Mental Competence - The person lacks competence, in the view of the testator. 3.) Spendthrift - The person has no clue as to the real value of money. 4.) Interest - The person lacks interest in the management of property. 5.) Maturity - The beneficiary lacks maturity - possibly a minor. 6.) Experience - Beneficiary lacks the experience to manage property. 7.) Prudence - The beneficiary likes to take on more than a reasonable amount of risk. |
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Duration of a Trust for Young Persons:
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1.) At the age of 21
2.) At 21, and through school 3.) In installments 4.) At the discretion of a trustee 5.) For life - Trust baby. |
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Duration of a Family Trust:
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As long as is necessary to hold the family unit intact.
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Duration of a trust: Minors and incompetent persons:
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Continued until a child reaches the age of majority: 18, 21, or later depending upon the express notice of the trust.
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Duration of a Trust: Physically incapable, or Incapacitated Persons:
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As long as the physical condition continues. Usually means throughout the lifetime of a beneficiary.
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Duration of a trust: Thriftless , Indifferent or Imprudent persons
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Usually throughout the lifetime of the person in question.
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Duration of a trust: Inexperienced persons.
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Depends upon the situation. No definitive answer can be given.
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Definition of a living trust:
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A trust made operative during the lifetime of it's creator.
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Other names for living trusts:
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1.) Voluntary trusts
2.) Immediate trusts 3.) Inter vivos trusts: Trusts made between the living. |
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Types of living trusts:
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1.) Charitable trusts
2.) Employee trusts 3.) Corporate trusts |
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Kinds of Guardianship: Ad Litem
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Appointed by the court to represent a mentally incompetent person or minor in the face of suit. IS NOT A GUARDIAN OF THE PROPERTY.
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Kinds of Guardianship: Of Property
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Guardian of the property
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Kinds of Guardianship: Of the Person
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Guardian of the person, but not of the property.
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Kinds of Guardianship: By Will
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AKA - Testamentary Guardian - Guardian named in the will as the preference of the testator.
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Kinds of Guardianship: By Parenthood
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A surviving parent is naturally the guardian of a minor child.
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Kinds of Guardianship: By Election:
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In some states, a child over the age of 14 is able to elect her own guardian.
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Kinds of Guardianship: By Judicial Act:
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The court makes the selection of the guardian, of it's own election.
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Kinds of Guardianship: By His Own Wrong:
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AKA "De son tort" - A person who assumes the responsibility of the minor/incompetent person without a court appointment.
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Kinds of Guardianship: Ancillary:
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A person who manages the property of a minor or incompetent in a different locale. Reports to a principal guardian.
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Kinds of Guardians:
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1.) Individuals
2.) Banks or Trust companies. |
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Doctrine of Cy Pres(pronounced "pray":
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In a charitable trust, it allows the amendment of the trust to the original intent of the testator...so that the trust will not fail. It will fail if there was no general charitable intent stated.
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Drive-by rule: What duty, and what is it?
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The duty to preserve property. Must at least drive by the property annually, in person.
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Power to lease: What is the rule for the determination of time in leasing property, as a trustee?
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Residential – 1 year
Commercial - 3 years Industrial – 30 years The lease should never be beyond the life expectancy of the beneficiary. If you do this, then the lease may be void. |
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What gifts are excluded from being considered a taxable gift?
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Unreimbursed medical expenses (unlimited)
The payment of educational expenses (unlimited) |
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What is the annual gift tax exclusion amount?
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13K per year, to each donee, from each donor.
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If you die holding a General Power of Appointment, what happens?
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For tax purposes, the corpus of the trust passes into the general body of the estate, and will be subject to tax.
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Doctrine of Laches:
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If trust has been breached, you have a reasonable amount of time to sue, from when the breach is discovered.
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Uniform Trust Code:
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Permits conversion of a traditional trust to a unitrust. An income beneficiary receives a set percentage of total assets being held each year as income.
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Rules for leases:
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You cannot enter a lease that extends past the probable duration of the trust unless the document gives you the right. This is based upon life expectancy.
If you lease beyond probable life expectancy thee lease becomes void and goes to the remainderman if the income beneficiary dies prematurely. In the case that it does void the remainderman can still lease the property if they wish (at any price). |
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At what age does a guardianship terminate? Why is this important?
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18. A guardianship can last no longer than 18 years of age, and maturity cannot be taken into account.
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Will a trust fail for lack of a trustee? Why?
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Never. If a trustee dies, then the court will select a new trustee. The trust itself is governed by other laws.
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5 things that a trust needs:
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Creator
Beneficiary Property Terms Trustee |
