Scope of VA UTC Flashcards
What is an express trust ?
Settlor creates the trust, the trustee holds the property, the beneficiary enjoyed the property
assume that the trust is non charitable unless a charitable purpose is stated
What is a constructive trust ?
an equitable remedy to prevent fraud
Can also occur when property has been fairly and properly acquired but it is contrary to the principles of equity that it should be retained.
What is a resulting trust ?
An implied trust that can arise when:
- One person purchases property but has title has conveyed to another (the property holder is deemed to hold the property in a resulting trust for the payor unless the payor intended it as a gift )
- An express trust fails and settlor has not declared his intent; or
- The trust purpose is fully satisfied but some trust property remains (the property reveres to the settlor or her heirs)
Personal and fiduciary capacity of trustee
- Trustee holds legal title for the benefit of the beneficiaries
- Beneficiaries hold equitable title
- Trustee’s personal creditors cannot reach assets to satisfy the trustee’s personal debts
However, if a trustee breaches her fiduciary duties, her personal assets are at risk to remedy the breach
When does the VA UTC apply
- to express trusts, including trusts required to be administered as express trusts
- To testamentary trusts, but does not override probate rules
Virginia trustee of testamentary trusts must
- qualify before clerk of court
- Furnish a bond with surety unless surety is waived; and
- File an accounting unless the requirement is waived by instrument
What is not governed by tht UTC
- Constructive trusts and resulting trusts
- Va land trusts
- Security interest deeds of trust
- Pension trusts
- Church and cemetery trusts
UTC definition of knowledge
- Actual knowledge;
- Notice or notification of the fact; or
- Reason to know the fact from all circumstances known to the person at the relevant time
Qualified beneficiary is
- A permissible distributee of trust income or principal; or
- Would be a permissible distributee of trust income or principal if either the interests of other qualified beneficiares terminated, or the trust itself terminated
qualified beneficiary for charitable trusts
- Any charitable organization designated to receive distributions; and
- The AG of Virginia
When can representation occur ?
- Guardians can represent wards
- parents can represent a minor or unborn child if no guardian of the estate has been apppinted
- Grandparent or more remote ancestor can represent a minor or unborn person not otherwise represented
- Holder of testamentary general power of appointment may represent and bind permissible appointees and takers in default
Virtual representation
A minor, incapacitated, or unborn individual, or a person whose identity or location is not known may be represented by another having a “substantially identical interest” under the trust
Can the court appoint a representative ?
Yes, if a person’s interest is not adequately represented
Default Rules
Most rules imposed by the Virginia UTC are default rules. Meaning that any contrary terms in a trust are controlling
Mandatory rules
May not be altered by the trust instrument, including the requirements for creating a trust, a trustee’s duty to act in good faith etc
