What is a trust?
A legal arrangement where a settlor transfers property to a trustee for the benefit of a beneficiary
A trust involves specific duties and intentions by the settlor.
What are the requirements for creating a trust?
- Settlor has capacity to create a trust
- Settlor has intent to create a trust
- Trust has a definite beneficiary
- Trustee has duties to perform
- Same person is not the sole trustee and sole beneficiary
These requirements ensure the trust is valid and enforceable.
What is a support trust?
A trust where the trustee can only distribute income as necessary, usually for education, health, and support
This type of trust limits the trustee’s discretion in distributions.
What is an inter vivos trust?
A trust created during the lifetime of the settlor
It involves a present donative intent and a present transfer of property.
True or false: A trust can be created with oral instructions.
TRUE
An oral trust requires clear and convincing evidence to be enforceable.
What happens to property distributed by gift or inter vivos trust?
It is REMOVED FROM PROBATE ESTATE
This allows for the direct transfer of assets without going through probate.
What is a constructive trust?
An equitable remedy that arises independently of the intention of the parties
It is established by construction of law and can involve estates.
What can a party ask the court regarding a constructive trust?
To declare a constructive trust when there is potentially unjust enrichment
This legal action aims to prevent one party from benefiting at the expense of another.
What does present donative intent mean in the context of a trust?
The clear intention of the donor to pass title to the property at the time of the trust’s creation
This intent is crucial for the validity of the trust.
Can a trust be revocable?
Yes, a trust can be revocable
This means the settlor retains the ability to alter or terminate the trust.
What is the role of a trustee?
To manage the trust property and perform duties for the benefit of the beneficiaries
The trustee has a fiduciary responsibility to act in the best interest of the beneficiaries.
