3 types of trust
express, constructive, resulting
Constructive trusts and resulting trusts are called “trusts,” but are relationships imposed by the
law, usually as a _______________________ for a wrong (or to prevent a
wrong).
remedy
Express trusts (hereafter called “trusts”) are ….
arrangements intentionally set up by one person to
benefit one or more other people
A trust (i.e., express trust) is a formal arrangement intentionally created by a
___________________, under which a trustee manages property for
the benefit of a _____________.
settlor; beneficiary
formal definition of express trust:
“A fiduciary relationship with respect to property, subjecting the person
by whom the title to the property is held to equitable duties to deal with the property for
the benefit of another person, which arises because of a manifestation of an intention to
create it.”
what is a charitable trust?
-express trust for charitable purposes
-typically w/large class of beneficiaries
whats a private trust?
-express trust for non charitable purposes
-most common use of the private express trust is in estate planning
-trust terms control
-power of appointment (allowing holder of power to determine who receives trust property)
what is a constructive trust
-equitable remedy that arises by operation of law
-not made by peoples interests
-law imposes it on someone who holds legal title to property in order to remedy or prevent fraud
resulting trust
a trust that is implied by law when one person pays consideration for property but arranges for title to be conveyed to a third person
-does not intend to make a gift to that third person
The hallmark of the trust arrangement is that the trustee holds
_______________________ title, but not
_______________________ title, to the trust property.
legal; equitable
Virginia follows the …
Uniform Trust Code (the “UTC”), with a few modifications.
what is a testamentary trust?
a trust created by will
the VA UTC applies to
-express trusts, be they charitable or private
-trusts made by statute, judgment, or decree if theyre required to be adminned as express
-testamentary trusts
what must a trustee do?
-qualify before court or clerk
-furnish a bond with surety unless its waived
-file an annual accounting girl u know about this
VA UTC does NOT apply to
-constructive trusts
-va land trusts
-security interest deeds of trust
-pension trusts
-church trusts
-cemetery trusts
“knowledge” as used in the VA UTC for a person means….
someone has
-actual knowledge of that fact
-notice or notification of that fact OR
-based on all the facts known to her at the relevant time she has REASON TO KNOW that fact
“knowledge” as used in the VA UTC for a corporation means….
corporation has knowledge of a fact if:
-its received by an employee having responsibility to act for the trust, or;
-would have been brought to the employee’s attention if the corporation exercised reasonable diligence
if there is a conflict, the _______ controls.
trust instrument
what rules are mandatory in the UTC and cannot be modified by the trust instrument?
-requirements for creating a valid trust
-duty of the trustee to act in good faith and in acc. w/terms + purposes
-req. that the trust and its terms be for the benefit of the beneficiaries and that the trust will have a lawful purpose not contrary to public policy and possible to achieve
-power of court to modify or terminate
-effect of spendthrift provision and the rights of certain creditors and assignees to reach trust assets
-effect of exculpatory clause
-rules regulating third party liability
-limitation periods for bringing a judicial proceeding
-power of the court writ large
does VA UTC displace common law rules about trusts or the law of equity ?
no they continue to apply as long as there is no conflict
if there is a conflict between VA UTC and common law trust law or equitable rule which controls
va UTC
Under the Virginia UTC, the terms of a trust are interpreted under
“[t]he law of the jurisdiction
designated in the terms [of the trust] unless the designation of that jurisdiction’s law is contrary
to a strong public policy of the jurisdiction having the most significant relationship to the matter
at issue.
5 methods to make a trust
-transfer of property by the settlor to someone else during settlor’s lifetime
-declaration by the owner of property that the owner holds identifiable property as trustee
-transfer of property under will (testamentary trust)
-exercise of a power of appointment in favor of a trustee
-a petition by an interested party to a VA circuit court
elements of a trust:
-settlor w/capacity to make trust
-settlor must have intention of creating a trust
-does NOT have to be written ORAL OK BUT there must be CLEAR AND CONVINcING EVIDENCE
-void if created through fraud duress or indue influence
-lawful
-one or more beneficiaries
-must have a trustee
-if trustee is not VA resident they must appoint a VA resident as agent for service of process
