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 Holds equitable title.  Enforces fiduciary duties against trustee.  Capacity = ability to take and hold property.

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Presentation on theme: " Holds equitable title.  Enforces fiduciary duties against trustee.  Capacity = ability to take and hold property."— Presentation transcript:

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2  Holds equitable title.  Enforces fiduciary duties against trustee.  Capacity = ability to take and hold property.

3  Must be clearly ascertainable.  Problems 1-3, page 81

4  Multiple beneficiaries allowed:  Concurrent  Successive

5  Trust lacking a human beneficiary or charitable purpose.  Care for pet  Say masses  Erect monuments

6  Traditional approach = invalid  Not private as no human beneficiary  Not charitable as lacking charitable purpose

7  Modern trend  Pets = 45 states plus D.C. recognize statutory pet trusts ▪ Trust Code §  Other purposes = allowed under UPC and UTC ▪ No equivalent provision in Trust Code.

8  No equitable title but benefits from the trust nonetheless.  Typically, unable to enforce trust.  Perhaps fit as “interested person” under “affected by” language of § (7).

9  Cannot exert dominion, control, or accept benefits.  May “cherry pick” (partial disclaimers allowed).  Irrevocable and unconditional

10  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

11  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.

12 [same as we learned for disclaiming as a beneficiary of a will]

13  Issue arises if beneficiary is married.  Assume trust is not created by one or both spouses.

14  Principal distributions  Beneficiary’s separate property (gift)

15  Undistributed trust income  Not yet able to classify until beneficiary has a right to demand distribution.

16  Discretionary income distributions  Separate.

17  Mandatory income distributions  Commentators disagree and case law not definitive.

18  When statute applies:  Divorce on or after September 1,  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.

19  Statutory revocation of the following provisions:  Ex-spouse as beneficiary.  Ex-spouse as trustee.  Other ex-relatives as beneficiary.  Other ex-relatives as trustee.

20  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.

21  Presumption = able to transfer:  Inter vivos (by gift or sale)  At death (via intestacy or by will)

22  Restrictions:  Life Interest – Beneficiary only received a life interest.  Spendthrift provision – Beneficiary prohibited from transferring.

23  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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