General
What is the person who maintains legal title and the person who maintains equitable title (respectively)
Trustee, beneficiary
What is the date for the change in RAP rules, and what was the change?
Sept. 1, 2021 - RAP period changed from 21 years to 300 years.
What is the effect of divorce on a trust?
The ex-spouse and any step-children are presumed to no longer benefit from the settlor's trust, unless the trust was executed after divorce, there was a court order, there's express language in the trust, or express language of contract re: division of marital estate entered into before, during, or after the marriage (marital agreement/prenup)
When is bond not required of a trustee? (2 answers)
When the settlor waives it and when the trustee is a corporate trustee.
What is another way of saying trust principal, corpus, res, or estate
Trust property
What are the two ways to show that there was intent to create a trust?
1. Dividing the title into legal and equitable components
2. Imposing fiduciary duties on the holder of legal title for the benefit of the holder of equitable title
What does HEMS stand for?
Health, education, maintenance, support
When is delegation of duties allowed?
When a prudent trustee of comparable skills could properly delegate
What are the two types of trusts?
Private/individual trusts and charitable trusts
What is the type of trust called when the settlor retains legal and equitable title, but gives the remainder to another party?
A Dacey Trust
What are the requirements for a valid beneficiary of both a private trust and a charitable trust?
Private trust beneficiary must be clearly ascertainable, charitable beneficiary must benefit society/community.
Under what 3 circumstances is a trustee able to get reimbursed for an employee/agent's tort?
When the tort is a common incident in the business with which the trust is engaged, it's a strict liability tort, or the tort increased the value of the trust (conversion).
Under what two circumstances is a trust irrevocable?
When the trust instrument states that it's irrevocable, and when the settlor is dead.
What are the requirements for a person to be eligible to be a trustee?
Legal age, competent, power to act in Texas
What are the exceptions to the protections of a spendthrift clause? (3 answers)
When the settlor is the beneficiary, when the beneficiary owes child support, and when there are federal taxes owed.
What is the difference between conclusive evidence of trustee acceptance and presumption of acceptance?
Conclusive evidence is a signature on the trust instrument or a separate document, whereas the presumption is created when the trustee begins performing trustee duties.
Where are capital gains allocated?
Principal
To satisfy the statute of frauds, the writing must contain these two things
Evidence of the terms of the trust and the signature of the settlor or an authorized agent
What is the name of a person who benefits from a trust but is not named as a beneficiary?
An incidental beneficiary
What must a co-trustee do when they want to express disagreement with other trustees' decisions?
Not join, or express dissent even if joining; exercise reasonable care, dissent in writing, and give dissent to any co-trustee at or before time of action
What are (at least) 3 of the 8 remedies available against trustees?
Money damages, removal of trustee, decree to carry out trust, injunction, receivership, require or increase bond, declaratory judgment, criminal sanctions.
What are the requirements of a valid express trust?
Trust intent, capacity, statute of frauds compliance, purpose, property, trustee, beneficiary, and RAP compliance
What are the formalities of disclaimer?
In writing, declared, describe what's being disclaimed, Indicate whether disclaimant owes child support which would then prohibit disclaimer, signed by beneficiary, properly delivered
What is the exception (type of property) for when a trustee is allowed to sell trust property in one trust to another trust for which they are the trustee?
When the property is a bond, note, bill, or other obligation issued or fully guaranteed as to principal and interest by the US government, AND it is sold at its current market price