Trusts Terminology

Question 1

Requirement of a Valid Trust

Answer 1

1. Intent to create a valid trust with a valid purpose
2. Ascertainable Trust Property (“res”) - This is the corpus, the principal, the subject matter of the trust
3. Ascertainable Trust Beneficiaries - Required for private and honorary trusts

Question 2

2 Types of Trust

Answer 2

Express - Created purposefully by the settlor and are in writing.

Implied - Created by the courts and are classified as (1) resulting trusts and (2) constructive trusts.

Question 3

Three Trust Categories

Answer 3

1. Private Express
2. Charitable
3. Honorary

Question 4

Private Express Trust

Answer 4

Intent to create a life-income trust, where the settlor names a trustee and property to be handled by the trust. (All to beneficiary)

Question 5

Honorary Trust

Answer 5

A trust designated to a beneficiary that cannot complain. (Example: Trust to dog or mausoleum)

Question 6

Time Classification of Trusts

Answer 6

Inter Vivos - Created during settlor’s lifetime. Inter vivos trusts may be created by:

a) Declaration of Trust - Settlor declares trust
b) Deed of Trust - Settlor transfers property with intent to create a trust.

Testamentary Trust - Created in settlor’s valid will

Question 7

Capacity Needed to Create Trust

Answer 7

Testamentary Trust- is same as a will
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-Understand nature of the act
-Comprehend character and extent of property
-Know the natural objects of the bounty
-Understand the disposition being made
Inter vivos trust - the greater of the capacity to hold and transfer property. The settlor must be able to completely transfer property during lifetime