Types

Question 1

Testamentary Trust

Answer 1

• Trust created by a will
• Must have material provisions of trust in will
• The trust is effectuated at T’s death according to the terms in the will

Question 2

Pour-over Trust

Answer 2

-Devise to trust, the terms of which are not set forth in the will

• Elements:
• trust identified in T’s will
• terms of trust in written instruments other than will
• trust executed before or concurrently with execution of T’s will

Question 3

Secret Trust

Answer 3

• Absolute gift made in reliance on a promise to hold property in trust for another (“to John”–where intent is that John is trustee for Mary)
• Trust does not appear on face of will; devisee orally promises T to use property for another person & T dies having devised in reliance of promise
• Constructive trust remedy: extrinsic evidence okay. Issue is unjust enrichment

*Note: must prove by clear and convincing evidence

Question 4

Semi-Secret Trust

Answer 4

• Gift in will to a person “in trust” but fails to name beneficiary (“To John, to hold in trust”)
• Will mentions trust but does not specify beneficiary or terms of trust
• Resulting trust remedy. No extrinsic remedy

Question 5

Spendthrift Trust

Answer 5

• Trustee restrained from transferring res to creditors and beneficiary restrained from transferring interest and support
• Income may not be transferred to creditors until paid to beneficiary. After it is paid, upon petition of court, creditor can ask for a judgment against beneficiary
• Creditors can’t reach res or spendthrift’s trust interest until received, EXCEPT:
• K’s for necessaries
• Alimony & Child support
• Tort
• Government

*Note: invalid is settlor is beneficiary

Question 6

Support Trust

Answer 6

• Trustee limited to paying particular sum of money for beneficiary’s support
• Effect: same as spendthrift; non-transferability/creditors. Cannot reach res unless excepted.

-Issue: lifestyle (station in life)/inflation

Question 7

Discretionary Support Trust

Answer 7

• Trustee given discretion to apply or withhold payments to beneficiary
• Beneficiary has right to support only if in need & to extent of need
• Same exceptions as above if beneficiary can’t pay

Question 8

Charitable Trust

Answer 8

1. Must be for a charitable purpose (look to how trust operates in fact)
2. Trust must be in favor of a reasonably large number of UNidentifiable beneficiaries (as opposed to the usual requirements that beneficiaries be ascertainable)
3. Not subject to RAP–charity to charity. Can last forever
4. Cy pres doctrine: when specific charitable purpose no longer can be accomplished, may be reformed when necessary to carry out intent of settlor (vs. resulting trust)

Question 9

Operation of Law: Resulting Trust

Answer 9

• Lack of trust elements; OR
• Purpose accomplished & corpus not exhausted (failure of private express trust); OR
• Purpose cannot be accomplished; OR
• Semi-secret trust; OR
• Purchase money resulting trust (real property with consideration paid by someone other than the new title holder)

Question 10

Operation of Law: Constructive Trust

Answer 10

• Court imposes to prevent unjust enrichment (court compels D wrongfully holding title to transfer title to prevent unjust enrichment)
• BFP: cuts off equitable remedies. Trustee holds consideration in trust for beneficiaries

Question 11

Operation of Law: Purchase Money Resulting Trust

Answer 11

• Consideration paid by person other than one receiving title (S of F if real property)
• Rebut with oral evidence of gift (no S of F problem)
• When close personal relationship involved, gift presumed
• If fraud, then constructive trust

Question 12

Honorary Trust

Answer 12

• For the benefit of a pet/maintenance of burial places
• Trustee is “on her honor” to carry out its terms
• Trustee must be WILLING to perform
• Subject to RAP