revocable trusts, charitable trusts, resulting trusts and constructive trusts, creditors claims, Flashcards

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1
Q

In IL what is the rule for inter-vivos trusts

A

INTER-VIVOS TRUSTS are IRREVOCABLE and cannot be amended UNLESS the settlor expressly reserves the power to revoke or amend the trust

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2
Q

in IL are inter-vivos trusts presumed irrevocable

A

YES

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3
Q

does divorce revoke all gifts etc to former spouse

A

yes

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4
Q

Is a trust void as an attempted testamentary disposition (doesn’t have the requirements of execution of will)

A

NO.

  • no W needed to trust
  • needs to be written and signed by T but no W’s required
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5
Q

requirements of a pour over will

A

1) must be in existence BEFORE or EXECUTED concurrently with a will,
- trust cannot be created after the will is signed

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6
Q

special rules for charitable trusts

A

1) not subject to RAP
2) must be for charitable purpose
3) in favor of reasonably large segment of public at large
4) cy pres doctrine

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7
Q

what are examples of charitable purposes

A

social benefit, religion, education, relief of poverty, medical research

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8
Q

can a charitable trust name individuals

A

NO. must be for large segment of public at large

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9
Q

who has the standing to enforce charitable trusts

A

attorney general

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10
Q

cy pres doctrine

A

if intent of trust is destroyed, complete, or impossible, court can construe trust to a near as possible factor as original trust

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11
Q

what is an honorary trust

A

an object is the beneficiary.

ex: car

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12
Q

what is trustee rule for honorary trusts

A

trustee ON HER HONOR in deciding w/e to perform the trust

  • gift is valid only in the sense that it will be upheld if chose to perform.
  • If gift fails, resulting trust
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13
Q

is a trust valid for the benefit of an animal

A

YES

- but trust terminates on death of animal

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14
Q

are outright bequests to animals ok

A

NO

- b/c animals cannot hold title to property.

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15
Q

2 situations where resulting trust created

A

1) where a trust fails for some reason (pay to my best friends)
2) PURCHASE MONEY RESULTING TRUST

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16
Q

what is a purchase money resulting trust

A

A pays purchase price of land, and causes the title to be taken in B’s name. A and B are not related.

  • Presumption: if not related
    1) gift or
    2) loan of purchase price
  • if related: PRESUMED GIFT
17
Q

2 elements for constructive trusts

A

no a trust, just equitable remedy

1) WRONGFUL CONDUCT and
2) UNJUST ENRICHMENT

18
Q

steps for constructive trusts

A

1) first apply the law: if it will fail then go to 2
2) apply equity:
(A) wrongful conduct and
(B) unjust enrichment

19
Q

In IL can a person have a self-settled trust to hide assests from creditors

A

NO

20
Q

are spenthrift provisions allowed in IL

A

YES,. protects a trust B’s from creditors from voluntary or involuntary transfer.
- cannot be reached by garnishment or attachment

21
Q

x/c for spendthrift trusts

A

1) contracts for necessities: medical, food, rent
2) child support ARRERAGES (not future child support)
3) any interest retained by settlor
4) federal tax liens

22
Q

can creditor get income AFTER a spendthrift trust is paid to B

A

YES, once the income is distributed, it is no longer subject to trust or clauses

23
Q

can creditors get irrevocably transferred to 3rd parties?

A

NO as to settlors creditors b/c does not own anymore.

24
Q

x/c where settlors creditors can get transfers to 3rd parties

A

fraudulent transfers: transfer made with intent to defraud, delay or hinder creditors

25
Q

once again what is the presumption of an inter-vivos trust in IL

A

presumed IRREVOCABLE and cannot be amended unless the S expressly reserves the power to revoke or amend the trust

26
Q

Are there any requirements for amending a trust for formalities

A

No particular formalities are required to amend a trust, even if the amendment affects a disposition under a settlor’s will.

27
Q

requirements for pour over will

A

1) a trust must be evidenced by an instrument that was in existence when the will was created and (must be in existence at time of will)
2) identified in the will.

28
Q

is a pour over will valid even if the trust is amendable

A

yes.

29
Q

what is a discretionary trust

A

where the trustee is given discretion whether to apply or withhold payments to a B

30
Q

in discretionary trust can a B assign their right to trust before a trustee makes payment

A

NO, not assignable, creditors cannot reach until trustee makes payments.

31
Q

support trust

A

a trust where the trustee is REQUIRED to pay or apply as much of the trust is as necessary for the support of the B

32
Q

does trustee has discretion under a support trust

A

NO. no discretion to refuse to pay bills necessary for B’s support.

33
Q

discretionary trust

A

Trustee is given discretion w/e to apply or withhold payment of trust property to B

34
Q

can the B interfere with the exercise of Trustee in discretionary trust

A

NO unless the trustee abuses the power.

35
Q

when will court interfere with trustee’s discretionary power

A

ct. will not interfere unless the trustee has acted in bad faith or dishonesty

36
Q

general rule for a pour over will

A

the trust must be in existence or must be executed at the time of the will’s execution

37
Q

x/c for pour over will where trust does not need to be in existence at time of pour over will execution

A

a will may devise property to a trustee of a trust established or to be established DURING THE TESTATORS LIFE.
- the trust may be established AFTER the will is executed BUT BEFORE THE TESTATORS DEATH