1) Validity

Question 1

trust: def

Answer 1

flexible fiduciary relationship, where one person provides assets, and another holds the assets, for the benefit of a 3rd party

Question 2

trusts: approach

Answer 2

1) what kind of trust?
2) valid?
3) administerd appropriately?
4) accounted for appropriately?
5) any interest in trust transferred?
6) any changes/modifications to trust, or terminated?
7) is there a trust by operation of law?

Question 3

express trust: kinds

Answer 3

1) private

2) charitable

Question 4

private vs charitable trusts: differences

Answer 4

1) private trust requires ascertainable beneficiaries but charitable trust does not – AG or gvt can enforce
2) c. must be created for charitable purpose
3) cy pres applies to charitable only

Question 5

trusts created by operation of law: kinds

Answer 5

1) resulting trust

2) constructive trust

Question 6

resulting trust: def

Answer 6

equitable reversion back to the person who created the trust –> result when express trust fails for some reason

Question 7

constructive trust: def

Answer 7

equitable remedy imposed by a court to prevent unjust enrichment

Question 8

main people involved in trust

Answer 8

settlor
trustee
beneficiaries

Question 9

settlor: def

Answer 9

creator of the trust, who establishes and funds it

Question 10

trustee

Answer 10

administers and managest trust. OWNS LEGAL TITLE

Question 11

beneciary

Answer 11

receives the benefit of the trust. OWNS EQUITABLE TITLE

Question 12

legal / equitable title: who

Answer 12

trustee: legal
beneficiary: equitable

Question 13

requirements for a valid trust

Answer 13

1) capacity
2) intent
3) identifiable trust corpus
4) ascertainable beneficiaries
5) created for a proper purpose
(6? w proper mechancis)

Question 14

valid trust: capacity: def

Answer 14

–settlor must have capacity (similar to wills)

Question 15

valid trust: capacity: presumption

Answer 15

–capacity is presumed, in the absence of fraud, undue influence, or mistake

Question 16

valid trust: intent

Answer 16

• -18 + of sound mind

- -must manifest present intent to create trust, CONCURRENT WITH transfer of trust property

Question 17

valid trust: intent: ways it won’t work

Answer 17

1) precatory language

2) settlor retains too much control

Question 18

precatory language: def

Answer 18

does not clearly express intent to impose enforceable duties on transferee

Question 19

precatory language: result

Answer 19

does not create a trust

Question 20

precatory language: exs

Answer 20

wish, hope, request, desire that you use the property to benefit another

Question 21

valid trust: identifiable trust corpus: def

Answer 21

trust must contain existing interest in real or personal property.

property must be transferred ot the trustee

must be identifiable, separate from other property owned by trustee

Question 22

valid trust: identifiable trust corpus: expectancy?

Answer 22

no – have to own it now

Question 23

valid trust: future interest

Answer 23

yes – if future interest in real property (that’s conveyable, dnn to be possessory)

Question 24

valid trust: debt

Answer 24

yes, BUT the trustee can’t be the debtor

Question 25

valid trust: ascertainable beneficiaries: def

Answer 25

can be any person capable of taking and holding title to property --if private trust must have explicitly identifiable beneficiary

Question 26

valid trust: ascertainable beneficiaries: class gift problem

Answer 26

if language to create class is too indefinite, trust will fail! ok for trustee to pick from a group as long as group is ascertainable and definite

Question 27

valid trust: ascertainable beneficiaries: class gift, trust fails, result

Answer 27

if trust fails bc too indefinite, result: court will make resulting trust (equitable reversion back to settlor)

Question 28

valid trust: must be created for proper purpose: def

Answer 28

proper purpose can be any lawful purpose

Question 29

valid trust: must be created for proper purpose: NOT a proper purpose

Answer 29

1) trustee must do crime or tort | 2) purpose contrary to public policy

Question 30

valid trust: must be created for proper purpose: rule for charitable trusts

Answer 30

--must be created expressly (can't be implied by law)

Question 31

ways to create a trust

Answer 31

1) declaration 2) inter vivos transfer 3) testamentary transfer

Question 32

create trust: declaration: how

Answer 32

settlor declares that she is holding property for beneficiary. Must identify + separate trust property from own. (settlor and trustee are same person!).

Question 33

create trust: inter vivos: how

Answer 33

under SOF must be in writing by person who had power to create the trust at time of transfer IF real property (but not personal property)

Question 34

create trust: inter vivos: what if don't designate trustee?

Answer 34

- -can't transfer legal title | - -but, trust won't fail. Court can appoint

Question 35

create trust: inter vivos: what if don't designate trustee?: exception

Answer 35

* settlor specifies that the existence of the trust is dependent on acceptance by the named trustee

Question 36

create trust: inter vivos: settlor designates trustee who lacks capacity or has capacity but refuses to be trustee

Answer 36

--court will appoint replacement | again, unless clear that settlor only intended for 1 person to serve as trustee and now it failed

Question 37

create trust: testamentary trust: reqs

Answer 37

1) can create trust thru will 2) must be in writing 3) trust must be ascertainable from: (a) the will (b) other docs properly incorporated (c) facts w significance apart from effect on disposition of property

Question 38

create trust: testamentary trust: designated trustee lacks capacity or refuses

Answer 38

court will appoint one

Question 39

secret trust: def

Answer 39

face of will gives no indication of trust (looks like cash) | + separate agreement btwn testator and beneficiary that it will be a trust

Question 40

secret trust: rule

Answer 40

extrinsic evidence is allowed to establish existence of trust

Question 41

semi-secret trust: def

Answer 41

face of the will indicates existence of trust but w/o all the dx (often w/o beneficiary).

Question 42

semi-secret trust: rule

Answer 42

extrinsic evidence is barred and the trust fails.

Question 43

semi-secret trust: result

Answer 43

resulting trsut (give back to settlor)

Question 44

pour over will: def

Answer 44

testator uses will to fund a trust created prior to his death

Question 45

pour over will: Uniform testamentary Addition to Trusts Act

Answer 45

if trust existed before, or after will, doesn't matter -- pour over provision is still valid

Question 46

totten trust

Answer 46

bank acct payable on death, universally recognized as valid