Trusts Flashcards
(26 cards)
What capacity is required in settlor?
Capacity to convey title to trustee
What capacity is required in trustee?
Contractual capacity
What is the effect of a trust w/o a designated trustee?
Trust will not fail. Court will appoint suitable trustee.
How may a designated trustee accept his position as trustee?
By signature, or by conduct (performing trust duties/exercising trust power) – unless environmental law investigation
What is the standard for removal of trustee?
Basis must be so extreme that ability of trustee to faithfully perform trust duties is compromised
What is the statute of uses?
In Michigan, no trust arises if the “named trustee” has no powers or active duties. In this case, beneficiary has full legal title rather than equitable trust interest.
What is Michigan’s alternative vesting period?
Under MUSTRAP, valid if interest actually vests or terminates w/in 90 years after interest’s creation (wait-and-see approach)
When is a restraint on marriage permissible?
When it is a partial restraint, rather than a total restraint; or, when its purpose is to pay support during widowhood
Validity of oral trusts of personal property
Valid for tangible and intangible personal property only if established by C&CE
When may a guardian or conservator revoke a trust on behalf of settlor?
If authorized by trust instrument AND court approves
When may an agent under durable POA revoke a trust?
If authorized by trust instrument or POA
What is the time period for contesting validity of a trust?
Earlier of: 2 years from settlor’s death or 6 months from being given notice of trust and copy of terms that may affect that person’s interests
What is a durable power of attorney?
Authorization for an agent to act on behalf of principal; not affected by principal’s incapacity, but terminates upon death
What is a springing durable power of attorney?
POA becomes effective upon disability or incapacity, but terminates upon death
What is the standard for a “charitable purpose”?
Must confer substantial amount of social benefit for education, religion, education, health, relief of poverty, research, or governmental purpose
What are the requirements for a charitable trust?
- Must be for charitable purpose and 2. Beneficiaries must be unidentified
What is the doctrine of cy pres?
If specific charitable purpose no longer exists, and there is a general charitable purpose that can still be purposed, court will instruct trustee to pay income to org carrying on activities “as near as possible” to named charity’s operation
How long is a reversion interest in a charitable trust valid?
50 years from settlor’s death
How long is an honorary trust valid?
If for the care of an animal, for the life of the animal. For other reasons, up to 21 years.
What are the elements required for imposition of constructive trust?
Wrongful conduct + unjust enrichment
What is the MI slayer statute?
Killer forfeits interest in V’s estate, treated as though predeceased V. Killer’s descendants may still take by representation.
What if beneficiary under will engaged in abuse of the elderly?
Abuser forfeits interest in V’s estate, treated as though predeceased V. Abuser’s descendants may still take by representation.
What are the exceptions to validity of spendthrift trusts in MI?
1) Child or former spouse w/ court order for support or maintenance, 2) Judgment creditor who provided services to protect beneficiary’s trust interest, 3) Claims involving US or state of MI, 4) Any interests retained by settlor (unless APT)
What are the requirements for a qualified APT?
Settlor must sign qualified affidavit stating: 1) transfer won’t make him insolvent, 2) no intent to defraud creditors, 3) no knowledge of threatened or pending court actions, 4) not in arrears in child support >30 days
