Trust

1. Charact's
   1. Legal Title 2 Trustee
      1. Trustee manages & controls
      2. Trustee has duty 2 protect trust princ.
   2. Equit. Title 2 Benefic.
      1. Can have C/A in ct. of equity if trustee breaches trust duty
   3. Settlor / Grantor
      1. Gives prop. 2 trust
      2. Has no C/A if trustee breaches
      3. Could B own trustee
   4. Revocability
      1. CA default is revocable which is min.
      2. Can have tax adv's if irrevocable trust
   5. Dif. Types
      1. Inter vivos if transf. 2 trust during life
      2. Private exp. trust
      3. Testamentary trust created by will
         1. Irrevocable by default everywhere
      4. Oral trust of personalty ok in CA
   6. Rsn 2 Create Trust
      1. Obtain trustee 4 investment mgmt
      2. Successive ownership / dynastic
      3. Tax adv's
      4. Protect benefic.
      5. Avoid probate
      6. Pvcy
      7. Creditor proof
      8. Charitable arr.
   7. Trustee's Pwr
      1. Grantor's discretion 2 set up trust 2 let trustee invade princ. / not
      2. C/L default gives no mgmt pwrs 2 trustee
      3. Gen'ly canned investment trust has trustee's pwr 2 manage / invest
2. Categ's of Trust
   1. Rules of Construction 2 Det. Categ's
      1. Common meaning of words relied on
         1. Words like wish / hope probably not bind
         2. Bossy words like "shall" demo. intent 4 trust
      2. Very specif. gifts probably trust
      3. Fin'al status of parties
         1. If status of alleged donee is fid. probably trust
   2. Abs. Gift
   3. Abs. Gift w/Prayerful Lang. w/No Legal Effect
      1. Precatory words facially not binding
   4. Trust & Reqts
      1. Intent
         1. Need present intent 2 create trust
      2. Prop. / res / corpus / princ.
         1. Trust comes 2 existence when prop. passes
         2. Duty 2 earmark trust asset clearly & segregate
         3. Not trust prop.
            1. Hope / expectancy
            2. If nontransf'able like soc. sec. / lottery winnings
         4. Bankruptcy
            1. Creditor can't reach trust prop. if trustee bankr.
            2. If trust prop. merged w/trustee's prop. then benefic. becomes gen. creditor
            3. Might B breach of trust & partial destruction of trust 4 bank 2 invest in same bank
      3. Transf. / 4 ways 2 create trust
         1. Settlor decl's 2 B trustee
         2. Transf. by will / inter vivos trust
         3. K 4 enforceable oblgn 2 B held in trust / present intent 2 create trust by K
         4. Exercising donee's pwr of appt'ment
      4. Trustee needs active duties
         1. Stt of uses of 1535 converted passive arr. into legal estates except 4
            1. All personalty
            2. Non-freehold int. in realty leases
            3. Uses on use
            4. Active uses which led 2 trust law
   5. Totten Trust
      1. Bank acct w/trust 4 somebody else
      2. Not real trust but pretend it's real so can skip probate
      3. Now consid'ed revocable trust & implied nec. terms
      4. Revoke if
         1. W/draw, it's partial revoke
         2. Death of benefic., then compl. revocation
         3. Will can revoke exp'ly / impliedly
      5. Creditors can reach
      6. Not care abt. stt. of uses, Wills Act, / that silent trusts R irrevocable gen'ly
      7. Presume irrevocable if creator tells benefic. / gives bank bk 2 benefic.
   6. Failed Attempt 2 Make Trust

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Ms. Haeji Hong

December 17, 1997