Trusts - TRUSTS I. TYPES a. Testamentary Trust i. Created...

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TRUSTS I. TYPES a. Testamentary Trust i. Created in a will 1. Court has to approve the trustee and has jurisdiction over the trust b. Intervivos Trust: i. O owns property and wants to create a trust in which X and Y will be trustees for the benefit of O’s spouse and children. ii. See requirements below c. Normal Parties i. Trustee – Has legal title to the property in trust 1. Do not NEED a trustee, maxim in the law it wont destroy the trust ii. Beneficiary – Has Equitable title to the property in trust II. REQUIREMENTS FOR CREATION a. DELIVERY i. MUST HAVE DELIVERY OF LEGAL TITLE TO HAVE A VALID TRUST ii. COMMON LAW & EPTL 1. Delivery of Legal Title : a. Create the trust for consideration O must either give the subject matter of the gift or something else i. Typically, Write out deed a deed of gift saying you transfer the property in the trust to the trustees and then deliver the deed of gift. b. O is trustee himself: Don’t need delivery since don’t need to transfer legal title. ( NY Adds another requirement ) iii. NY EPTL 7-1.17 1. Delivery required + 2. : Mere declaration of trust without change of form of ownership is insufficient. Every lifetime trust shall be in writing and notarized. . There has to be at least one trustee that has his name signed and notarized. 3. If O names himself as the sole trustee. a. Must have the deed of gift recorded with the registry of deeds (see below (?)) i. Note: This applies when O is the sole trustee, 1. Thus O can avoid this result by naming a third party Co-trustee iv. Uniform Trust Code( UTC): 1. If trust is created and valid in another jurisdiction then the trust is valid here. b. ACCEPTANCE i. COMMON LAW 1. Acceptance of Trusteeship: When does Trustee Accept a trust? a. UTC 701(a)(2): a person designated as trustee accepts the trusteeship by accepting delivery of the trust property. b. Restatement of Trusts § 35: designated trustee may accept trusteeship either by words or by conduct. i. A trustee that does not accept , may timely decline. 1
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ii. It is a question of fact in each case whether the trustee has manifested an intention to accept or reject a trusteeship. iii. Merely protecting the property temporarily, until trustee is appointed does not indicate intention to accept. c. If X absconded (secretly abandoned w/ out telling Bs) is he liable? i. Yes: If he accepted the trust X has a fiduciary responsibility to the Bs, here he has not renounced the trust, cant hand it over to anyone he wants d. Once he accepts is late to renounce the trust? i. Ask: has X by his conduct manifested his intention to be trustee ii. Question of Fact, but if Trustee keeps the money for 9months in a safety deposit box w/out telling anyone that might qualify for acceptance e. i. X is still a bailey – He has rightful possession of someone else’s property ii. If X then decides to declines being the trustee, and delivers the goods to
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This note was uploaded on 01/31/2010 for the course LAW TRUSTS & E taught by Professor Schwartz during the Fall '08 term at Yeshiva.

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Trusts - TRUSTS I. TYPES a. Testamentary Trust i. Created...

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