barbri_outline_-_ny_(2005)_-_trusts

barbri_outline_-_ny_(2005)_-_trusts - TRUSTS I. Overview A....

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T RUSTS I. Overview A. Express trusts – arise from the expressed intention of the owner of property to create the relationship 1. Private – one or more ascertainable persons as beneficiaries, subject to RAP 2. Charitable – cannot be for the benefit of identifiable beneficiaries, can be perpetual B. Implied or imposed trusts – not exactly trusts, but court-imposed remedies 1. Constructive trusts – simply a name for an equitable remedy the court imposes in cases involving (i) fraud, (ii) unconscionable conduct, & (iii) unjust enrichment 2. Resulting trusts – the remedy the court uses when an attempt to create a trust fails C. Trust-like mechanisms E.g. Joint bank accounts with rights of survivorship ; Totten Trusts ; custodial gifts to minors NOTE: trust law applies ONLY to express trusts II. Requirements for a valid Trust A. General 1. Trust – an arrangement for making gifts of property and for the management of assets, under which: a. Trustee – holds legal title for the benefit of beneficiaries & has burdens of ownership (duty to manage, safeguard, invest, etc.); b. Beneficiaries – have equitable title and all the benefits of ownership. Can sue the trustee if needed 2. Valid trust – creator (settlor) delivers legal title as to the res (trust property) to a trustee for the benefit of beneficiaries with intent to create a trust for a lawful purpose . a. No consideration is required for the creation of a trust b. Trust can be created during the creator's lifetime (“lifetime trust”) or by will (“testamentary trust”) c. All lifetime trusts must be evidenced by a writing that is signed by the settlor and trustee and either acknowledged before notary public OR witnessed by two witnesses . B. Creator (grantor / trustor / settlor) must be over age 18; must have capacity to enter into contracts, transfer title. C. Delivery of legal title mere intent to create a trust , or gratuitous written promise to create a trust, is NOT enough 1. Titled assets – legal title must be formally transferred to the trustee; 2. Other assets – transfer must be by a written assignment to the trustee NOTE: “Delivery” requirement does not apply to testamentary trusts because wills law controls D. Res (corpus / principal / subject matter of the trust) – to have a trust, legal title to specific property ( certain and identifiable ) must be formally transferred to the trustee 1. Res need not be tangible property, BUT the settler must have an assignable interest 2. Property that settler expects to own in the future but has no present right to transfer is only an expectancy 3. But if written promise to create trust of property (to be received in future) is supported by consideration , under contract principles trust automatically arises upon receipt of the property E. Trustee – an individual named as trustee must be of legal age and must not be incapacitated
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This note was uploaded on 09/22/2011 for the course LAW LAW taught by Professor Concordia during the Spring '11 term at Concordia AB.

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barbri_outline_-_ny_(2005)_-_trusts - TRUSTS I. Overview A....

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