Trusts

Type of Trust

100

a legal title to property held by one party for the benefit of another revocable unless expressly irrevocable

What is Trust?

200

arises from the expressed intention of a property owner to create it this particular one is created for the benefit of ascertainable beneficiaries

What is Express - Private?

300

created for the benefit of the public - purposes are liberally construed - must have indefinite beneficiaries - cy pres doctrine applies - if a designated one goes out of existence, court may redirect trust to a purpose as near as possible - enforced by the attorney general

What is Charitable Trust?

400

arises when an express trust fails or fully accomplishes its purpose without using all of the trust estate, and the settlor has not specified an alternative disposition trustee holds the property for the benefit of the settlor or settlor's successors in interest

What is Resulting Trust?

500

an equitable remedy in cases involving wrongful conduct and unjust enrichment

What is Constructive Trust?

Trust Validity

100

this to divide property into legal and equitable interests - manifested by the settlor's words, writing, or conduct watch for precatory language

What is Intent?

200

any legal this will satisfy this element - cannot be against public policy

What is Purpose?

300

subject matter of trust - can include any property that can be transferred (including life insurance life insurance proceeds)

What is Res?

400

Requires legal age, competence, capacity to enter into Ks can be settlor but cannot be sole this and sole beneficiary trust will not fail if not named or resigns, court will appoint one cannot accept a trust in part and disclaim it in part

What is Trustee?

500

must be susceptible of identification by the time their interests are to come into enjoyment class is okay as long as it is definite

What is Ascertainable Beneficiary?

Rights of Parties

100

This person has the right to - revoke or amend the instrument - appoint the income/principal - add/withdraw property - remove or control trustees - receive income - act as sole trustee

What is Settlor

200

has the right to -disclaim his interest -sue to compel -get trustee removed fro breach of trust -an accounting interest is also freely transferable - can voluntarily assign his right to income or principal, but the transferee takes the interest subject to all conditions and limitations that would have applied but for the transfer

What is Beneficiary?

300

this person has broad powers and right to compensation and has duty to -segregate trust property (no commingling) -to account (keep beneficiaries reasonably informed and must account at least annually and on change of trustee or termination of trust) -to perform personally but can employ agents to perform any act of administration whether or not discretionary -to delegate investment functions - must given written notice to beneficiaries -to diversify -to be fair and impartial to all beneficiaries

What is Trustee?

400

Trustee must observe the statutory standards in dealing with trust assets that would be observed by a prudent trustee dealing with property of another (must take into account both probable income and safety and preservation of principal) Trustee with special skills or expertise is held to a higher standard Prudence determined at time investment was made

What is Prudent Trustee Rule?

500

Trustee cannot buy/sell trust assets, borrow trust funds or make loans to the trust, use trust assets to secure a personal loan, or personally gain through her position as a trustee it is an automatic wrong, so the only issue is damages (surcharge, profits, losses, interest, and removal) defenses: consent or ratification

What is No Self-Dealing?

Miscellaneous

100

If fraud is present, they can reach trust assets Absent fraud, they can reach only what has been retained

What is Settlor's Creditors?

200

A court may remove trustee for breach of trust, incapacity, unfitness, refusal to account or post pond, conflict of interest, insolvency, or extreme friction between trustee and beneficiary

What is Removal?

300

prohibits the voluntary or involuntary transfer of beneficiary's interest before it is paid to him exceptions: satisfaction of alimony and child support obligations

What is Spendthrift Trust?

400

This applies if res includes real property

What is Statute of Frauds?

500

Testamentary trust must comply with this

What is Statute of Wills?