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13 Cards in this Set
- Front
- Back
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What is a trust?
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A trust is a fiduciary relationship consisting of a settlor intentionally placing property for the benefit of ascertainable beneficiaries with a trustee.
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What are the required elements to form a trust?
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SIPTA
1. Settlor/Donor/Grantor - 18 yrs + and of "sound mind" 2. Intent to properly create 3. Property/Res 4. Ascertainable beneficiaries 5. Trustee granted legal title to res |
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Must there be an actual transfer of property to create a trust?
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No, if the declaration of intent, res and beneficiary is objectively sufficient. The grantor and trustee can be one in the same.
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Can a trust be created through a future intent?
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No. There must be an objective manifestation of a present intent to create the trust for the benefit of another.
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Can a trust require a person to engage in illegal activity or violate public policy?
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No.
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May a trust be created orally?
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Yes, as long as it doesn't involve real property, which requires a writing -- usually a deed or other conveying document -- signed by the settlor and acknowledged if real property is transferred to the trust.
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May a settlor place in a trust his right to an inheritance or potential future profit?
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No, the settlor must presently own the property to be transferred. If the settlor's right to a future property interest has vested, the present interest requirement is satisfied.
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What interest does the beneficiary of a trust have?
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An equitable interest to the res.
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Must the trust agreement identify a specific person or beneficiary?
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No. A valid beneficiary must be identified or definite or there must at least be a definite method of selection indicated in the trust agreement.
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How does the UTC construe the term "surviving heirs" in a trust creating an heir remainder?
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The UTC construes the term to mean "surviving heirs" as of the date of distribution.
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Will a trust fail for want of trustee?
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No. Acceptance by the trustee is not necessary. A court will appoint a trustee if the named trustee refuses to serve, resigns, or disclaims.
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What happens if the trustee is or becomes the only beneficiary?
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There is a merger and the trust fails or terminates. There must be at least one other person who owns part of the legal or equitable title to the res who is different from the trustee.
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When might an otherwise unenforceable promise to create a future trust become enforceable?
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If supported by consideration sufficient to form a contract -- e.g., some detriment by the future trust beneficiary such as agreeing to a prenuptial agreement waiving alimony rights.
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