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Published bySidney Morman Modified over 9 years ago
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Holds equitable title. Enforces fiduciary duties against trustee. Capacity = ability to take and hold property.
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Must be clearly ascertainable. Problems 1-3, page 81
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Multiple beneficiaries allowed: Concurrent Successive
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Trust lacking a human beneficiary or charitable purpose. Care for pet Say masses Erect monuments
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Traditional approach = invalid Not private as no human beneficiary Not charitable as lacking charitable purpose
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Modern trend Pets = 45 states plus D.C. recognize statutory pet trusts ▪ Trust Code § 112.037 Other purposes = allowed under UPC and UTC ▪ No equivalent provision in Trust Code.
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No equitable title but benefits from the trust nonetheless. Typically, unable to enforce trust. Perhaps fit as “interested person” under “affected by” language of § 111.004(7).
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Cannot exert dominion, control, or accept benefits. May “cherry pick” (partial disclaimers allowed). Irrevocable and unconditional
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Formalities: In writing. Acknowledged (notarized). Delivered to trustee not later than 9 months after the later of: ▪ Date of trust creation ▪ Beneficiary reaching age 21 ▪ If future interest, date it indefeasible vests
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Passage of property Under specific terms of trust (“If A disclaims, then the property passes to X.”) Under terms of trust as if beneficiary predeceased trust creation.
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[same as we learned for disclaiming as a beneficiary of a will]
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Issue arises if beneficiary is married. Assume trust is not created by one or both spouses.
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Principal distributions Beneficiary’s separate property (gift)
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Undistributed trust income Not yet able to classify until beneficiary has a right to demand distribution.
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Discretionary income distributions Separate.
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Mandatory income distributions Commentators disagree and case law not definitive.
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When statute applies: Divorce on or after September 1, 2005. Trust is written. Trust is revocable. Settlor named his/her spouse (or other ex- relative) as beneficiary or trustee. Trust is silent as to impact of divorce.
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Statutory revocation of the following provisions: Ex-spouse as beneficiary. Ex-spouse as trustee. Other ex-relatives as beneficiary. Other ex-relatives as trustee.
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Effect Property passes as if ex-spouse or ex-relative disclaimed. Fiduciary designations interpreted as if ex- spouse or ex-relative died before marriage terminated.
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Presumption = able to transfer: Inter vivos (by gift or sale) At death (via intestacy or by will)
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Restrictions: Life Interest – Beneficiary only received a life interest. Spendthrift provision – Beneficiary prohibited from transferring.
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Priority of Assignments Note 1, page 86 English view = notice necessary to complete the assignment as against a subsequent assignee American view = first assignee prevails
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