2. Types of Trusts (UTATA)

Question 1

What is the purpose of Inter Vivos Trust?

Answer 1

Property passes to Beneficiary during Settlor’s lifetime (NO will)

Question 2

What is required for Inter Vivos Trust?

Answer 2

1) Trustee’s declaration/Transfer of property (not necessarily possession)

2) Intent
- Present (delivery/words)
- Future (re-manifested when Settlor acquires res)

3) Writing
- Land transactions (Statute of Frauds) (otherwise constructive trust)
- Oral allowed (clear + convincing evidence of trust) (personal property)

4) NO ambiguity
- Parol evidence/Extrinsic evidence allowed to clear ambiguities

Question 3

What is the purpose of constructive trust?

Answer 3

Flexible equitable remedy to prevent unjust enrichment

Hold property for Beneficiary who would have received property but for wrongful conduct

Remedy wrongful conduct (clear + convincing evidence)

• Theft/Conversion
• Fraud
• Duress
• Breach of fiduciary duty
• Homicide

Question 4

What is the purpose of Testamentary Trust?

Answer 4

Property passes to Beneficiary after Settlor’s death (by will)

Question 5

What is required for Testamentary Trust?

Answer 5

1) Testamentary capacity
2) Testamentary intent
3) Signed by Testator in writing
4) In Witnesses’ presence
5) Signed by 2 Witnesses
6) In Testator’s presence

Question 6

What are the types of testamentary trusts?

Answer 6

Secret trust

• For named Beneficiary
• Failure => Constructive trust

Semi-secret trust

• For unnamed beneficiary
• Failure => Resulting trust

Question 7

What is the purpose of a pour-over will?

Answer 7

Settlor can transfer gift from will to inter vivos trust during Settlor’s lifetime

Question 8

What is required for a pour-over will?

Answer 8

Uniform Testamentary Addition to Trusts Act (UTATA)

1) Trust clearly identified in will
2) Trust existence
- Trust existed at time of will execution (traditional view)
- Trust existed before Testator’s death (modern view)

Question 9

What is required for a charitable trust?

Answer 9

1) Indefinite beneficiaries
- Specific charitable entity
- Court can appoint unnamed beneficiaries (consistent with Settlor’s intent)

2) Perpetual duration
- Charity-Charity use
- Private-Charity use (RAP must be satisfied)

3) Charitable purpose (benefit public)
- Religious
- Governmental
- Scientific
- Medical
- Research

Question 10

How may charitable purpose be reformed?

Answer 10

Cy pres doctrine

1) Impracticable/Unlawful/Impossible/Wasteful purpose
2) Charitable trust/Outright charity bequest
3) General purpose (conclusively presumed by UTC states)
- NOT specific purpose (gift will revert to Settlor)
4) Court may select alternative (nearest) purpose by ascertaining Settlor’s primary purpose