specialty Trusts

Question 0

Parties of a Totten Trust

Answer 0

bank, depositor, beneficiary

Question 1

Totten Trusts - defined

Answer 1

hybrid of a will and trust
do not have to comply with formalities of a will
allow depositor to retain full control over account until death
then it passes to beneficiary
beneficiaries have no rights in trust until death

Question 2

revocation, termination, or modification of a totten trust

Answer 2

withdrawal of funds from account
writing acknowledged and filed with bank where account is maintained
can be revoked by depositors will
or naming beneficiary in a will with specific account
revoked to the extent of any withdrawal

Question 3

Beneficiary rights to a Totten Trust on death of depositor

Answer 3

vest in beneficiary subject to claims by depositors creditors
and wifes elective share

Question 4

Totten trust beneficiary is a minor

Answer 4

funds less than $10k must be paid to minors parents

funds greater than $10k funds must be paid to a duly appointed guardian

Question 5

Supplemental Needs Trust

Answer 5

enables person with disability to collect limited income from trust without sacrificing eligibility for Medicaid or other forms of govt assistance

Question 6

Honorary Trust

Answer 6

Trust that is not a charitable trust because it does not have a charitable purpose and
not a private trust because no definite beneficiary

violates rules for trust creation and rule against perpetuities
courts will not enforce them
trustee can carry out terms if willing to do so

Question 7

Statutorily Authorized Honorary Trusts

Answer 7

Trust to care for cemeteries or burial plots -
honorary trust to care for designated animal
pet trust terminates in 21 years of creation or on death of animal
court in its discretion can reduce amount transferred into trust if amount substantially exceeds amount needed to care for pet

Question 8

Limit on Duration

Answer 8

Private Trusts cannot last forever

Rule against perpetuities serves as primary limit

Question 9

Charitable Trusts

Answer 9

Must have a charitable purpose

includes religious, charitable, educational, or benevolent purposes

Question 10

major categories encompassed in the definition of charitable purpose

Answer 10

1. relief from poverty
2. advancement of education
3. advancement of religion
4. promotion of health
5. performance of governmental and municipal purposes
6. other purposes beneficial to the community
7. establish or maintain an observatory
8. for professorships and scholarships
   9 benefit public schools
   10 relief of distress, parks and recreation

Question 11

Charitable Trust Terms and Purpose

Answer 11

purpose can be broad if trustee constrained to use trust for objective
terms must facilitate charitable purpose
settlor cannot restrict benefits to a small group
beneficiaries must be indefinite

Question 12

Beneficiaries of a charitable trust

Answer 12

must be indefinite
limited number of persons actually receiving funds will not cause trust to fail if chosen from a sufficiently indefinite group

Question 13

Enforcement by Beneficiaries of a Charitable trust

Answer 13

Potential beneficiaries have no standing to sue unless
they comprise a small group of beneficiaries with a special interest in the trust

Attorney General has authority to sue to enforce trusts operating in NY
must be a party to any suit concerning a charitable trust

settlor can sue trust he created

Question 14

Charitable Trusts Perpetual Existence

Answer 14

Not subject to Rule against perpetuities with some exceptions

Charity to Charity Rule
and
Mixed Trust Rule

Question 15

Charity To Charity Rule

Answer 15

if a charitable trust is preceded by a non-charitable estate the charitable trust must vest within the period of time prescribed by the rule against perpetuities

Question 16

Mixed Trust Rule

Answer 16

has charitable and private purposes
A trust with both private and charitable purposes will fail unless
the private and public purposes can be segregated into separate trusts

Question 17

Modification under Cy Pres Doctrine

Answer 17

settlor’s charitable purpose cannot be carried out or was accomplished
settlor had a general charitable intent
court will direct trust property to another charitable purpose that approximates settlor’s intent

Question 18

How can court modify charitable purpose under Cy pres doctrine

Answer 18

with consent of settlor

Settlor not living - look for evidence of general charitable intent which is often inferred from the creation of the charitable trust itself.

Question 19

When court will not apply cy pres doctrine to modify charitable trust

Answer 19

where trust instrument makes clear preference trust should terminate
rather than continue if purpose cannot be accomplished.

gift over provision in instrument indicates lack of general charitable intent

Question 20

Cy Pres can be used to modify a valid existing charitable trust and not

Answer 20

turn a private into a charitable trust

or reform an invalid charitable trust

Question 21

Termination of a charitable trust

Answer 21

if trust cannot be performed and requirements for cy pres are not met
trust terminates

resulting trust in favor of settlor’s estate arises

Question 22

Termination of charitable trust by petition

Answer 22

on petition of trustee or Attorney general
trust assets fall below $100k
cost of administration is not justified by income generated

assets will go to the trust designee or to another trust with a similar purpose