Types of Trusts

Question 1

Express Trust

Answer 1

An express trust is where property is transferred from one owner to another and meets the above requirements, such that a trustee holds legal title for the benefit of a beneficiary, with the settlor having a present manifestation of intent to create the trust for a legal purpose.

Question 2

Testamentary Trust

Answer 2

is one created by a will, and the will contains the material provisions of the trust, and the trust arises upon the death of the testator.

Question 3

Pour Over Trust

Answer 3

A pour-over trust is one that is structured to receive and dispose of assets at the settlor’s death. A pour-over trust is often established through the settlor’s will.

Question 4

Secret Trust

Answer 4

A secret trust occurs when the settlor leaves a gift to the beneficiary on the face of his will without indicating an intent to create a trust in the will, but does so in reliance on a promise that the beneficiary will hold the property in trust for another.

Question 5

Semi-Secret Trust

Answer 5

A semi-secret trust occurs when the settlor leaves a gift in his will to a person in trust but does not identify the beneficiary of the trust.
Majority: trusts are invalid and apply a resulting trust
Minority: allow extrinsic evidence to prove the trust.

Question 6

Spendthrift Trusts

Answer 6

occurs when the beneficiary cannot voluntarily alienate his interest. such that his interests are protected from creditors unless for necessaries, alimony, and child support, or government creditors.

Question 7

Support Trusts

Answer 7

Support trusts directs the trustee to make limited distributions to pay for the beneficiary’s support, health, maintenance, or education, and is not accessible by creditors to the extent it would intervene with the support.

Question 8

Discretionary Trusts

Answer 8

A discretionary trust gives the trustee discretion to distribute or withhold payments, principal, or income to the beneficiary.

Question 9

Charitable Trust

Answer 9

A charitable trust is one that is for charitable purposes and benefits society.

Question 10

Cy Pres Doctrine

Answer 10

When a charitable objective becomes impossible or impracticable to fulfill, courts often apply the cy press doctrine and substitute another similar charitable object that is as near as possible to the settlor’s intent.

Question 11

Resulting Trust

Answer 11

If the cy pres doctrine will not fulfill the settlor’s intent, the courts will apply a resulting trust.

Question 12

Honorary Trust

Answer 12

a trust in which there is neither a private beneficiary nor a charitable purpose. Generally, these trusts are invalid, except to care for pets and maintain cemetery plots. However, once the pet dies, a resulting trust is applied.

Question 13

Trotten Trust

Answer 13

a trust where the settlor places money in a bank account with instructions that the named beneficiary takes any amount left at the death of the settlor.

Question 14

Resulting Trust

Answer 14

An implied in fact trust based upon the presumed intent of the parties and will transfer the property back to the settlor or his estate.

Question 15

Conditions which result in Resulting trust

Answer 15

1. The purpose of the trust is satisfied.
2. An express trust fails
3. A charitable trust ends and the cy pres doctrine is inapplicable.
4. The trust is illegal.
5. There is express corpus in the trust.
6. A purpose money resulting trust results where one party (beneficiary) pays consideration for property allows title to be taken in the name of another (trustee)
7. There is a semi-secret trust

Question 16

Constructive Trust

Answer 16

Is applied as a remedy to prevent unjust enrichment when:

1. There is self-dealing
2. There is fraud in the inducement or undue influence
3. Secret trusts are involved.
4. Oral real estate trusts are created