Intro

Question 1

What is a trust?

Answer 1

An arrangement under which the trustee holds legal title to property for the benefit of the beneficiaries. Trustee has burdens and beneficiaries have benefits of property ownership. Trustee is subject to fiduciary standards; he is not privileged to use trust property as his own. Harsh “self- dealing” rules preclude trustee from doing so.

Question 2

What is the requisite for a trust?

Answer 2

Creator … delivers … legal title of trust assets (the res) … to trustee … for the benefit of beneficiaries … with intent to create trust … for a valid purpose

Question 3

What is delivery of the trust?

Answer 3

Actual
Constructive (e.g. delivering the keys of a car instead of the actual car itself) 
Symbolic (e.g. a signed writing evidencing the gift) 
-To make the trust and delivery the trust must be irrevocable (can be ascertained with extrinsic evidence) 
Requirement does not apply to self-declaration of trust ("I hereby declare myself trustee ...") or testamentary trust. But for inter vivos trust with third party as trustee, there must be delivery of subject matter of the trust.

Question 4

Father executes a valid deed of Blackacre naming Daughter as the grantee. Subsequently, Father hands the deed to Brother telling him orally at that time “Hold this deed and record it if Daughter survives me.” 1. Does Brother hold Blackacre in trust for Daughter? 2. Did the father leave a valid gift for his daughter?

Answer 4

1. No - We did not put legal title of blackacre in Brothers name, this is an escrow arrangement
2. It depends; To make a gift, Father must deliver the property to the donee or the donee’s agent. Delivery can be actual, constructive (e.g., making a gift of a car by delivering the keys to the donee), or when actual or constructive delivery is not possible, symbolic (e.g., delivering a signed writing evidencing the gift). Regardless of the method, for Brother to serve as Daughter’s agent, the gift must be irrevocable. Thus, delivery of the deed to Brother is a valid gift to Daughter only if Father intended the delivery to be irrevocable. If he intended to retain the right to revoke the delivery, no gift occurs. Father’s intent must be ascertained from extrinsic evidence.

Question 5

What is a testamentary trust?

Answer 5

A testamentary trust is a type of trust that does not go into effect until the grantor (the person who made the trust) dies. Usually this type of trust is made within a will – often to create a trust for minors. When a trust is included in a will, the will goes into effect immediately, but the trust is not actually created until after the death of the will maker. - No delivery needed, this is done when the will is executed