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4 Cards in this Set
- Front
- Back
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"10(2) SENATE" is not bound by the spendthrift rules
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10 – 10% of distributed trust income can be seized by the trust beneficiary’s
judgment creditor 10 – Trust Income in excess of $10,000 can be assigned away by the beneficiary prior to its receipt, but only if assignment was gratuitous (no consideration received) AND assignee is a close family relative, not more distant than Aunt, Uncle, Nephew or Niece of the beneficiary S – Self-Settled Trusts, where the settlor and beneficiary are the same person, trust can be attached by creditors for up to 100% of the settlor’s interest. If settlor retained only a life estate, his creditors can only seize 100% of the life estate, not the remainder interest. E – Trusts that are Expressly made non-spendthrift N – If Necessaries are furnished to a beneficiary, the creditor is allowed to recover their fair value from the beneficiary’s trust income A – Alimony & Child Support Obligations T – Federal Income Taxes owed by the beneficiary E – Excess Trust Income that is not reasonably needed for maintenance |
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If you try to TIP a trust, that means litigation
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T – Terminate the Trust
I – Invade accumulated Income P – Invade trust Principal |
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RAP doesn’t apply to a future interest w/ a C2ROUP
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C – Covenant running with the land (PINTS & CANS)
C – A remainder interest passing from one Charity to another charity, but RAP may be violated if the future charitable interest is preceded or followed by a non-charity R – a Reversionary Interest retained by the grantor (a Possibility of Reverter, Right of Entry, or a reversionary interest on a long term lease (99 year lease)) O – A tenant’s Option to buy contained in a long term lease U – A future interest in trust benefiting the US government P – In MBE, Pre-emptive rights of first refusal to buy, but in NY, only first refusals of a commercial nature (business) or involving gov’t rights are exempt from RAP; thus, a right of first refusal on NY residential realty (between neighbors or among family members) must be fully and finally exercisable w/in the RAP period |
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RAP applies to CORE future interests
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C – Contingent Remainders
O – Options to Purchase retained in a deed by a grantor that possibly could be exercisable beyond the RAP period R – Remainder Interests that either follow a life estate or follow some event E – Executory Interests (remainders that follow a conditional fee --> fee simple determinable or fee simple subject to a condition subsequent) |
