trusts 2

Question 1

discretionary trust

Answer 1

trustees makes payments in its own discretion (in such case creditors can reach) 225
creditor cant reach

Question 2

support trust

Answer 2

bene can force trustee to pay out income to the level of support dictated by trust
some court say creditors can reach

Question 3

trust decanting

Answer 3

trustee could transfer to new trust
-Mod is an amendment decant just shifts trust
-Permitted when authorized trustee has power under the terms to invade its principal
-Second trust same bene , can’t doesn’t reduce vested interest
must be in writing
60 days notice
Settlor may prevent with provision

Question 4

special needs trust

Answer 4

physical or mental disability (amount or anything doesnt affect government benefits)
-self settled - think personal injury settlement then when dies pays back medicaid

-Third party special needs - for third party no need to refund medicaid

-Pool special needs trust - managed by non profit charitable - beneficiaries pool together for investing the fund , separate account for each bene , when die repay medicaid

Question 5

charitable trust

Answer 5

bene usually a charity or independent group no specific individuals , may be perpetual , not subject to rap

new florida law court seeks charitable bene with settlors intent

court may find new charity if one fails to exist (cy press doctrine)

Enforcement by attorney general the settlor organization set to receive

Question 6

honorary trust

Answer 6

no bene no charitable purposes (honor something like burial ground)
Enforced by someone named in trust or appointed by court

Question 7

pet rus

Answer 7

care for animals terminate at animals death , must be alive during settlors life time
Enforcement same as honors plus someone with interest of the animal may request

Question 8

truste epowers

Answer 8

buy sell lease mortgage repair insure and pay claims against prop
If has title can Convey to bona fide purchaser

Question 9

Imperative or mandatory power Discretionary power

Answer 9

must be exercised by trustee
may but not need be performed

Question 10

Prudent investor

Answer 10

trustee must manage and invest ad prudent investor
Must - take into account production of income and safety of capital and be consistent with duty of impartiality and purposes of trust

Question 11

Duty to diversif

Answer 11

unless trustee reasonably believes that not diversifying is in the interest of bene and furthers purpose of trust

Question 12

Duty of loyalty (self dealing)

Answer 12

trustee enters in transaction with trust for personal gain

Transaction will be voidable (bene may avoid transaction without regard to fairness)

Exceptions - person who deals in good faith with trustee not liable , does not arise if trustee authorized to invest invests in instruments owned by him

Question 13

Presumptively avoidable If conflict of interest

Answer 13

f conflict of interest- may be upheld if trustees proves fair
(trustee spouse enter into contract with trust)

Question 14

Liability avoided by trustee if

Answer 14

trust authorizes self dealing, contract made before trustee took office, bene failed to bring timely suit , settlor or bene ratify trans

Question 15

Impartiality

Answer 15

trustee can’t maximize one bene position to detriment of another

Question 16

delegation

Answer 16

allowed for functions settlor didn’t expect. Agents allowed to delegate if trustee uses due care in selecting and supervising

Question 17

other dutoes

Answer 17

252

Question 18

remedies for breach of financiary duties

Answer 18

njunction, removal of trustee, order to restore other relief

Question 19

Will ‘trust exculpatory clauses

Answer 19

lause to exculpate personal rep(not guilty) is unenforceable for bad faith or reckless indifference or in will from abuse by p rep
One drafted by p rep void unless communicated to testator

Question 20

Liability of trustee to third persons

Answer 20

tort-personal liable in trust administration if at fault personally

For testamentary trust trustee becomes trustee on settlors death so could be liable for things after settlors death but before he accepts

Contract , trust disclosed fid cap not liable personally on contrac

Question 21

Constructive Trust

Answer 21

court may impose a constructive trust if person has Gaines property through fraud mistake etc
Needs clear and convincing look at example 260

Question 22

Resulting trust

Answer 22

may ay arise if express trust fails in part or while and then legally inferred eg Sean trust to bill if bill reaches 21, bill doesn’t resulting trust to Sean

Question 23

262

Answer 23

263