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Trusts (Creation ("Is there a valid trust?" If no, then:, (1)…
Trusts
Creation
"Is there a valid trust?" If no, then:
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(7) Statute of Frauds and Statute of Wills, if necessary
(2) Intent: Present intent to create a trust now, not in the future. No particular words required, not even "trust"; just a manifestation of intent to create a trust.
(6) Proper Purpose: Virtually any purpose except an illegal purpose, a purpose that violates the Rule Against Perpetuities, or a purpose contrary to public policy
(3) Trustee: Must have mental capacity to administer the trust. Cannot be a minor or a mentally incompetent person. Corps. are allowed to be trustees.
(5) Identifiable Beneficiary: Except for charitable trusts, trust must have definite or ascertainable beneficiaries. Beneficiaries are equitable owners of trust property
(4) Res—Trust Property: Settlor places title to the trust property and delivers to the trustee by (a) an inter vivos transfer, or (b) a testamentary trust
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Classification
Trusts may be CLASSIFIED as an express trust, a charitable trust, a constructive trust, or a resultign trust:
Express trusts arise from the intention of the property owner: (1) private express trusts compromise most of the trusts established by individuals; (2) charitable trusts resemble private express trusts but have some significant, distinguishing characteristics
Express trust may be created by: (1) an inter vivos trust created by the property owner; (2) an inter vivos trust created by transfer of property during settlor's lifetime; (3) a testamentary trust created by a will.
Implied trusts arise by operation of law: (1) resulting trusts place property in the hands of rightful owners when circumstances require it; (2) constructive trusts deprive a wrongdoer from retaining improperly obtianed property
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Trusts = a fiduciary relationship where the trustee holds legal title to property with a duty to manage, invest, safeguard, and administer the trust assets and income for the benefit of designated beneficiaries, who hold equitable title.
A trust terminates automatically at the end of the trust term. A trust also terminates when all the purposes of the trust have been accomplished.
Modification of a trust depends upon which party seeks the modification: (1) Settlor can revoke or amend a trust unless the terms state it is irrevocable; (2) Beneficiaries "material purpose"; (3) Trustee can terminate a trust when the property's value is less than $50K and the amount is insufficient to justify the cost of admin.