week april 25-may 1 Flashcards
What is a testamentary trust?
- A testamentary trust (sometimes referred to as a will trust or trustunder will) is a trust which arises upon the death of the testator, and which is specified in his or her will. A will may contain more than one testamentary trust, and may address all or any portion of the estate.
What are 5 requirements for a valid trust?
There are five requirements for a valid trust: Grantor/settlor, intent, trust res (trust property), separate beneficiaries, and a lawful purpose.
How are disbursenments relating to real estate special assessments treated in a trust?
Disbursements relating to real estate special assessments are treated as reductions to principal. Roof repair are treated as reductions to income. Rental receipts are considered trust income.
When a purchaser assumes someones loan, is original borrower still liable?
Yes, both are liable
Recording mortgage
A pure race jurisdiction means a state which gives priority to the first to record, regardless whether they were aware of unrecorded claims
geberal warranty deed
A general warranty deed gives a grantee the highest degree of warranty protection. By a general warranty deed, a grantor warrants that s/he is the true owner; there are no liens or claims to the property other than those disclosed in the deed; the grantee shall have quiet enjoyment of the property; and, the grantor will defend title. There is no guaranty against a governmental entity pursuing a claim of eminent domain at a later date
Simple and complex trust
A complex trust is any trust that does not qualify as a simple trust.
A simple trust is defined by IRC Section 651 as one that meets three conditions during a year:
The trust instrument requires that all income must be distributed currently.
The trust instrument does not provide that any amounts are to be paid, permanently set aside, or used for charitable purposes.
The trust does not distribute amounts allocated to the corpus of the trust.
