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16 Cards in this Set
- Front
- Back
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Trust is defined as:
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an arraingment for making gifts of property and for the management of assets, under which trustee holds LEGAL title, and beneficiary holds EQUITABLE title.
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Elements to create a trust?
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•Settlor
•Delivers •Res (trust property) •to a Trustee •for the benefit of a Beneficiary •w/ Intent to create a trust •for a lawful purpose |
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Req's of a Settlor?
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settlor must have legal capacity
•18+ and capacity to convey title to Trustee. *higher capacity than for wills |
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req's of Delivery?
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NO delivery: to create a testamentary trust or self-declaration of trust.
YES delivery: inter-vivos trust requires delivery of Res w/ intent to convey title to Trustee |
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req's of Res (trust property)?
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Subject Matter of trust must be CERTAIN and IDENTIFIABLE
*legal title must be conveyed to Trustee. *a future interest IS an interest in property |
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Req's of Trustee?
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Must have capacity to contract and execute a deed.
*No trust ever fails for lack of naming a trustee (ct will appoint one) *No one can be compelled to serve as Trustee (ct will appoint one) |
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Resign from serving as a Trustee?
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Resign only by obtaining court approval, upon showing no longer appropriately serve as T, and give ct an accounting.
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Make an unrevocable trust?
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Settlor must expressly make the trust irrevocable (and unamendable)
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Presumption of revocable and amendable:
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all trusts are revocable and amendable by the settlor UNLESS expressly states otherwise.
**any revocation or amendment must be in WRITTING |
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Automatic Termination of Trusts
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a Trust will terminate automatically according to its terms
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JUDICIAL modification, amendment, or termination:
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Upon petition of a Trustee or Beneficiary, court may order that:
•Trustee be changed; •trust terms be Modified; •trust be Terminated: if [one of the following is met] |
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How long do Trustee's powers last after Trust is terminated?
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Trustee powers last reasonable time to:
•windup affairs of trust; •distribute property to beneficiaries |
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TX does NOT recognize Trustee by Estoppel
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NO one can be compelled to be a trustee
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proving INTENT to create a trust:
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the granting language must impose an OBLIGATION.
-ex: to hold 'for the use and benefit of ..." -NO intent if precatory language. |
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Purchase Money Resulting Trust?
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Where A pays purchase price for land, but causes title to be taken in an unrelated purpose.
*presumption: no intent to make a gift, A will sue seeking impose PMRT. *A can compel reconveyance at anytime UNLESS presumption that it was not a gift is rebutted. note: if A & B are related, presumed intended GIFT |
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Spendthrift trusts can be reached for:
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• child support obligation.
• federal tax lien. • contract for necessaries |
