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32 Cards in this Set
- Front
- Back
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Define trust like you would in the first sentence of a trusts essay
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A trust is a fiduciary relationship created when a trustee holds legal title to property for benef. Separation of legal and equitable title.
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How do you create an express trust?
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Conveyance to 3P, or by declaration or reserving rights in giving equitable title to 3P while retaining legal title in himself.
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What are required elements of trust?
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Settlor with capacity
Intends to create specific res identifiable bene proper trust purpose (inter vivos must have present intent to create trust) |
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Do you need a writing to create trust?
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Testamentary, yes.
Inter vivos orally for personal property Oral trust can be taken out of SOF by part performance |
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Other than writing, what else must trust have?
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Res,
Valid trust purpose Benefticiary capable of enforcing the trust |
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How are express trusts revoked?
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By reservation in writing in the trust doucment. This must be followed including anything about beneficiaries disclaiming.
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What key element must a charitable trust have?
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A charitable purpose
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Can a charitable trust be revoked by the settlor?
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Not unless that power is reserved
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Define the cy pres doctrine.
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Where specific charitable purpose intended by settlor has been accomplished and court makes new bequest as close as possible to settlors intent.
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If beneficiary dies, what happens to their interest in a trust?
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It passes to their heirs.
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What is a discretionary trust?
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where trustee has total discretion as to how and when to make disbursements. Done to frustrate bene's creditors and transfer attempts by bene.
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Define support trust
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One where trustee given discretion to pay out what is necessary for the bene's support.
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Spendthrift trust is somehting that is used for
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to prevent anticipatory spending of trust by beneficiary and to make it unreachable by creditors.
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Powers of invasion means that
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Trustee can go into principal of the trust for the comfort and support of the beneficiary
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Will courts go into the trust principal if there are a lot of beneficiaries?
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No.
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Trust may be modified only when
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Instrument allows modification
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A trust may also be modified when
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Beneficiaries all agree
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What is the duty of a trustee/
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To excercise reasonable skill and care unless he has higher skills than that
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Trustee cannot
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commingle trust property with his own.
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Trustee should do what with property of the trust
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Hold and preserve property of the trust against waste. If he fails to do this, constructive trust follows the commingled property.
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Trustee should manage and invest trust property as
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RPP and must make property productive
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Who has the duty to account for trust property?
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Trustee
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What is they duty of loyalty imposed on a trustee>?
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Utmost good faith, to avoid conflicts interest and to not have transactions with trust
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How should trustee treat beneficiaries of the trust?
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Impartially without regard to how or when or how much they take.
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Can a trustee sell trust property ?
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Yes, if permitted by trust instrument or court approval.
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What factors affect the distributions to benes>?
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The UPIA which requires:
a. fairness b. adherence to specific requirements for distrib in trust c. intent of settlor nature, duration purpose of trust d. tax consequences e. can invade principal |
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Who has a power of appointment?
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One who has power created by donor of property to designate transferees and how many shares they get. FLEXIBLE
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In what kind of document can a power of appointment be created?
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Will, trust or other.
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What is the difference between general and special powers of appointment?
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Under general, donee of the power can appoint to anyone.
Special means that the donee is limited by donor's selection of ultimate takers. |
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Creditors of the donee may seek to invade the assets within the power of appointment. What result?
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Donee is like a trustee, and their creditors cannot take.
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How is RAP stated in trust context?
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A bene's interest in a trust may vest if at all within 21 years after a life in being referred to in the trust.
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What is the rule against accumulations?
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Trust may only accumulate income for the period set out in RAP
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