Express Private Trusts

Question 1

Elements of an Express Trust

Answer 1

1) settlor with capacity to convey
2) present intent to create trust
3) competent tustee w/ duties
4) definite beneficiary
5) same person is not the SOLE trustee and SOLE beneficiary
6) trust property (res)
7) valid trust purpose

Question 2

Settlor’s Capacity

Answer 2

Same as will. Cant have undue influence, fraud, duress. must have legal power to convey

Question 3

Present Intent to Create Trust

Answer 3

written, spoken, or conduct. Check for SoW and SoF

Delivery of the deed to a trustee is sufficient

Question 4

Settler Owns Property

Answer 4

Settlor must own property when he intents to make trust and must intent for trust to take effect immediately

Question 5

Precatory expressions

Answer 5

Settlor’s expression of a hope, wish, or suggestion is precatory and does NOT create a trust

Question 6

How to avoid precatory expressions

Answer 6

1) definite and precise
2) direction addressed to a fiduciary
3) unnatural disposition
4) evidence showing settlor previously supported the beneficiary

Question 7

Trustee

Answer 7

an established trust will not fail because the trustee dies, refuses to accept or resigns. Court will apoint a successor unless clear that trust was meant to end with trustee

Question 8

Acceptance of a Trusteeship

Answer 8

BY
1) substantially complying with the acceptance terms in the instrument
or
2) accepting delivery of trust property, exercising powers or performing duties, or by indication.

Question 9

Rejection of a Trusteeship

Answer 9

Trustee may preserve the trust property and still reject by sending notice of rejection to settlor or beneficiary.

Question 10

Trustee must have Duties

Answer 10

Settlor must intent to impose enforceable duties on the trustee. IF no express then court will imply them.

Question 11

Qualification of Trustee

Answer 11

1) can acquire property
2) can administer the trust
Minors and insane can hold property but not administer

Question 12

Compensation and Reimbursement

Answer 12

Trustee is entitled to reasonable compensation and expenses

Question 13

Removal of Trustee

Answer 13

Upon request of the Settlor, beneficiary, or co-trustee.

based on whether the continuation would be detrimental

Question 14

Factors for Removal of Trustee

Answer 14

1) breach of trust
2) lack of cooperation
3) unfitness, unwillingness, or persistent failure
4) substantial change in circumstances

Question 15

Relation back of acceptance

Answer 15

When a testamentary trust is made the acceptance of trustee dates back to T’s death and Trustee can be liable for torts between death and “later” acceptance

Question 16

Resignation of Trustee

Answer 16

Either by 1) giving 30 days notice to beneficiaries, settlor, and co-trustees
or 2) obtaining court approval

Question 17

successor Trustee

Answer 17

takes all rights, powers, and privileges of original

subject to all duties, liabilities, and responsibilities

Question 18

MERGER of Trustee and Beneficiary

Answer 18

IF the SOLE trustee ever becomes the SOLE beneficiary then the two merge and the trust terminates

Question 19

Beneficiary

Answer 19

Necessary to the validity of every trust, except charitable and honorary trusts.

Question 20

Qualified Beneficiary

Answer 20

on the date of qualification is
1) current beneficiary
or 2) first-line remainderman

Question 21

Capacity of Beneficiary

Answer 21

any person capable of holding title

Question 22

Notice to and Acceptance by Beneficiary

Answer 22

Notice is not essential. Acceptance can take place after a valid trust is created. but it ultimately required. Acceptance is presumed

Question 23

Beneficiary Disclaimer

Answer 23

by written instrument within 9 months of the interests creation or after turning 21

Question 24

Beneficiary Disclaimer Estoppel

Answer 24

can be esttopped is exercised any dominion or control or received any benefits.

Question 25

Anti-Lapse Statutes

Answer 25

Several states + UPC apply anti-lapse statute to future interest created in trusts

Question 26

Divorce

Answer 26

Revokes all beneficial gifts | UPC extents to revokable designations of former spouse

Question 27

Unascertained Beneficiary

Answer 27

you MUST have define beneficiaries Beneficiaries can be definite even though not ascertained so long as they are ascertainbel at the time the interest are to come into enjoyment

Question 28

Class Gift

Answer 28

``` Class must be reasonable definite UTC - settlor can empower trustee to select class members from an indefinite class ```

Question 29

Resulting Trust

Answer 29

Trust fails for lack of beneficiary = resulting trust for settlor or his successors

Question 30

No Res = No Trust

Answer 30

Trustee must have property to manage

Question 31

Trust property

Answer 31

1) must be segregated from other property 2) debtor cannot hold own debt in trust 3) Trust property must be existing 4) Must be property that settlor has power to convey

Question 32

Trust purposes

Answer 32

``` Trust will be INVALID if purpose is 1) illegal 2) contrary to public policy 3) impossible to achieve or 4) intended to defraud the settlors creditors ```

Question 33

RAP

Answer 33

discuss RAP & wait and see

Question 34

Ways of Creating an Express Trust

Answer 34

1) Inter vivos transfer, 2) inter vivos declaration, 3) will

Question 35

Formal Requirements - SoF

Answer 35

look for SoF even though writing is technically required for trusts

Question 36

Secret Trust

Answer 36

Absolute gift in will to a person to hold property for another- results in constructive trust in favor of intended beneficiary

Question 37

Semi-Secret Trust

Answer 37

Gift in will to a person "in trust" but no beneficiary - results in "trustee" holding onto resulting trust for T's heirs