Trusts Set #2 Flashcards Preview

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Flashcards in Trusts Set #2 Deck (78)
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6 elements of a Private Express Trust

settlor, present intent, trustee, beneficiary, valid trust purpose, specific res


settlor requirements

"capacity to convey"; will be void for lack of capacity if undue influence (but for test), fraud, duress


test for undue influence

but for test


present intent

oral (but beware of statute of frauds or wills), writing, conduct by delivery or naming self trustee while settlor owned property that was delivered, with intent to take immediate effect, and NO precatory language



must be 18, competent capacity to enter into K, settlor must intend to impose enforceable duties


lack of trustee

trust does not fail; court can appoint a trustee


trustee removal

requested by settlor, beneficiary, or co-trustee: court will remove if "detrimental" to trust administration for 1-breach of trust, 2-lack of co-trustee cooperation, 3-unfitness, unwillingness or persistent failure to administer, 4-substantial change in circumstances


trustee resignation

must give 30 days notice to settlor, beneficiary, co-trustee(s), OR get court approval


sole trustee?

cannot be sole beneficiary, but okay if more than one beneficiary


trustee's creditors

cannot touch trust assets


trustee pay?

entitled to reasonable fee and reimbursement for expenses


beneficiary requirements

must be "definite and ascertainable" (including class BENS), current BEN or "first line remainderman" by the time interests are to "come into enjoyment"


beneficiary misc.

presumed to accept unless affirmatively disclaimed; not required for charitable or honorary trusts; if trust fails for lack of a BEN-a resulting trust in favor of the settlor is created


specific property RES

no res=no trust; future interests are okay if existing K; intangible property that settlor has assignable interest is okay; res cannot be mere expectations, personal debt, unenforceable gratuities promises


REs when Real Property

statute of frauds applies; if not in writing, use constructive trust


Oral Trust for Personal Property

valid if established by clear and convincing evidence


INvalid trust purpose

invalid if its purpose is illegal, contrary to public policy, impossible to achieve, or intended to defraud settlor's creditors or based on illegal consideration


Trust: if condition attached to interest is contrary to public policy

settlor's alternative desire controls if expressed


Trust: if illegal condition subsequent

condition is invalidated, but remains valid


Trust: if illegal condition precedent

hold interest valid unless evidence of settlor's desire to void entire interest if unenforceable


Rule Against Perpetuities for Trusts

Fl has a 360 year vesting period. a non-vested property is valid if 1-when the interest created is certain to vest or terminate w/n common law period of 21 yrs after the death of a life in being, or 2-it actually vests or terminates w/i 360 years. (if created prior to 12/31/00->90 yrs, not 360.


Creation of Express Trusts

1-inter vivos (during life transfer or declaration), 2-testamentary(at death, will)


Inter Vivos Transfer or Declaration

present intent manifested by conduct: delivery or naming self as trustee when trust property exists. ("I'm keeping my car for my nephew Q.")


Testamentary Trust

must be ascertained from the will itself, incorporated by reference to will, have independent legal significance, or from exercise of a power of appointment created by the will. Must comply with the statute of wills (writing, 2 witnesses in presence of each other).


Secret Trust

constructive trust imposed for intended BEN if absolute gift made in will relied on BENS promise to hold property for another. Extrinsic evidence is permitted.


Semi-secret trust

Trustee holds resulting trust for settlor's heirs where gift in will "in trust" but no BEN named. No extrinsic evidence permitted.


Charitable Trusts (differences from private trusts)

Indefinite beneficiaries, may be perpetual, and "cy pres" doctrine applies


charitable purpose

must benefit the public. (i.e. relief of poverty, education, religion, health, etc.)


Unascertainable beneficiaries (charitable trusts)

courts consider the community at large and a particular individual eligible for benefits to not have standing to enforce the terms. Enforcement is placed upon the state attorney general.


Cy Pres Doctrine

When a charitable purpose selected by the settlor is impractical, if the court finds that the STR had a general charitable purpose rather than a specific purpose to ONLY help the named charity, it can select an alternative charity to be the BEN. The alternative must be "as near as possible" to the STR's intent.