Introduction Flashcards
Who holds legal interest in the trust?
The trustee
Can a trustee be personally liable if they fail to act with reasonable care in carrying out their responsibilities towards the trust?
Yes
Who holds equitable title to a trust?
What is the limitation to their right?
The beneficiary.
They only get to benefit from the property in the way the Trust states.
Can a beneficiary sue the Trust if they feel it’s been administered incorrectly?
No, a trust is not a legal entity. The beneficiary would have to sue the representatives of the trust (trustees).
What are some of the benefits of a trust, which you may need to advise your “client” of in an exam question?
Protects beneficiaries (like minors)
Flexibility in asset distribution
Protects against settlor incompetence
Professional management of trust property
Probate avoidance (for inter vivos trusts)
Tax benefits
Which two types of Trusts are created by operation of law?
A resulting trust
Constructive trust
What are the two types of express trusts?
Private trusts
Charitable trusts
