boxshadowdwn How to pass property to care-giver by trust w/o litigation in Moss v. Axford ? o T could give property to Tee w/wishes that it be used in a certain way. square4 But Tee may die before Settlor. o Make a bequest to B conditional on Tee’s ability to give it to someone else if B doesn’t provide T w/care. o T could K w/ B to leave estate to B if B provides T w/ care. The B would have claim as K creditor if she provides T w/ care.
© Tal Dickstein 2002 29 Identity of Trust Property boxshadowdwn Identity of specific property must be sufficiently identified. boxshadowdwn Brainard v. Commissioner p.485/64 o T created a trust in favor of his children into which he would place stocks in the future – lower tax rate. o An expectancy cannot be the subject matter of a trust. Promise to transfer property in the future is invalid unless supported by consideration. o ITC : trust amounted to nothing more than a promise to create a trust in the future, but there was no consideration to support such a promise, it was merely gratuitous. o Trust may come into existence once property is actually acquired only by manifestation of T’s intent to create a trust thereafter. o Thus , stocks are taxable to settlor because they belong to him when purchased until passed to trust. ( See also Fed. Tax Shifting of Income) o STERK : what property is sufficient depends on the circumstances. ITC, court invalidates the trust because T is engaged in tax avoidance. See, e.g. , Speelman v. Pascal p.488 (upholding a trust whose only property was profits to be derived from a play which hadn’t yet been written). boxshadowdwn UPC §2-511 Standby-Trusts o Allows pour-over will into an unfunded “stand-by” trust Capacity to Create a Trust boxshadowdwn Testamentary Trusts – capacity standard is same as a T creating a will. See supra Part 5.I. boxshadowdwn Revocable Inter Vivos Trust – capacity standard is same as T creating a will. boxshadowdwn Irrevocable Inter Vivos Trust – depends on reasons for trust creation, ex : gift – must also understand the effect of the disposition on future financial security of the settlor/donor and those who may be dependent on him/her. boxshadowdwn Trusts may be challenged on grounds of fraud , undue influence just like wills . See supra Part 5.II. Intent to Create a Trust: The Precatory Language Problem boxshadowdwn Precatory language – “ wish, desire, hope ” boxshadowdwn Spicer v. Wright p.490 o T’s will bequeathed “ my estate to my sister . . . to be disposed of as already agreed between us .” o Ts Husband argues : this is language of trust . If so trust fails for indefiniteness b/c terms are unknown. o Precatory words directed to an executor are prima facie evidence of a trust, but precatory language directed to an object of T’s bounty does not create a trust unless there is testamentary intent to impose a legal obligation upon him/her to make a particular disposition of property.
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- Fall '06
- Inheritance, Intestacy, Will, intestate succession, Tal Dickstein