Trusts

Question 1

Trust

Answer 1

D-SEBLeT (Disposition Separates Equitable Bs Legal T)

1. Disposition of property which;
2. Separates Equitable to Bs and Legal title to T;
3. T manages for benefit of Bs.

Question 2

Trust validity (elements of)

Answer 2

1. Manifestation of intent to create (no writing unless realty);
2. Existing trust res;
3. Ascertainable beneficiaries; and
4. Delivery or declaration.

MIRAD

Question 3

Manifestation of intent to create a trust

Answer 3

1. Substance over form (no particular words);
2. Expression by S for T to hold for B;
3. Not Precatory.

SOFEP (Substance Over Form Expression Precatory)

Question 4

Proper trust purpose

Answer 4

1. Destruction of property
2. Religion
3. Illegal
4. Public policy
5. Marriage

DRIP-M

Question 5

Testamentary Trust

Answer 5

1. Will must be valid;
2. Testator must have Capacity;
3. Testamentary Intent; and
4. Formalities followed.

CIF

Question 6

Will validity

Answer 6

1. Adult, of sound mind, Duress, Undue influence, Mental infirmament, Suspicious circumstances;
2. Know nature and extent of property and testamentary act;
3. 2 disinterested Ws or holographic.

ADUMS-NETAD

Question 7

Beneficiary rights to compel distributions - types of trusts

Answer 7

1. C has no greater rights than Debtor/B
2. Mandatory
3. Absolute discretion
4. Discretionary with standards
5. Necessaries - creditors can attach.

CD-MAD-N (Creditor Debtor Mandatory Absolute Discretionary Necessaries Protective)

Question 8

Spendthrift trust

Answer 8

1. Bars B’s creditors from attaching trust property (involuntary alienation); nor can
2. B sell or gift away their interest (voluntary alienation);
3. Both must be present for valid spendthrift C protection.
4. Substance Over Form
5. C can still attach for Child support, Alimony, and Necessaries
6. Support trust is spendthrift by default, B gets necessaries.

VISOFANS (Voluntary Involuntary Substance Over Form Alimony Necessaries Support)

Question 9

Pour-over will

Answer 9

1. Testator names T of pre-existing (or concurrent) trust as B of probate estate;
2. incorporated by reference in the will
3. Must be a valid will (ADUMS-NETAD).

TNT-PET-ADUMS-NETAD (Testator Names Trust Pre-Existing Trust…will validity)

Question 10

Claflin doctrine

Answer 10

1. Unanimous Bs and
2. no Substantial impairment of material purpose;
3. UTC, no unanimous if non-consenting Bs interests protected;
4. Restatement requires unanimous Bs but applies balancing test.

USIMP-NUNC-RUB (Unanimous Substantial Impairment Material Purpose - No Unanimous Non Consenting Restatement Unanimous Balancing)

Question 11

Equitable deviation (changed circumstances)

Answer 11

1. Unanimous Bs
2. Status quo would substantially impair;
3. Modernly, modify if furthering trust purpose for admin and dispositive terms.

USQIS-FAD (Unanimous Status Quo Impair Substantially Further Admin Dispositive)

Question 12

Charitable trust

Answer 12

1. Manifest intent;
2. Res
3. Charitable purpose (poverty, health, education, religion, public benefit);
4. No RAP.

MIRPHERP (Manifest Intent Res Poverty Health Education Religion Public)

MIRCAR (Manifestation Intent Res Charitable Not Ascertainable RAP)

Question 13

Cy pres

Answer 13

1. Modify if
2. Illegal, impracticable, or impossible
3. finding of General charitable intent
4. As close as possible
5. Modernly, general intent is presumed; and
6. Reasonable approximation sufficient.
7. Resulting trust if counter to S’s intent.

III-GAPART (Illegal Impracticable Impossible General As Presumed Approximation Resulting Trust)