Notes--Trusts--Chart--1 day

By Angela Parker,2014-01-15 22:53
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Notes--Trusts--Chart--1 day


RULE: All income interests in trusts are AUTOMATICALLY given spendthrift protection (prohibiting

    voluntary or involuntary transfers of beneficiary’s interest


    Necessaries Child Support, Federal Tax 10% Levy for ANY Interest Excess Income

    Alimony Liens Judgment Retained by Beyond that

    Creditors Grantor-Settlor Needed for Support

     or Education


     NOTE: Last

    If settler only resort, must show

    retains income exhaustion of all

    interest, creditor other avenues of

    CANNOT touch recovery

    principal (unless it

    is a fraudulent



    Trustee CAN Trustee CANNOT

    Sell property at public/private sale Borrow money

    Mortgage property Continue a business

    Lease for up to 10 years Make extraordinary repairs/improvements

    Make ordinary repairs Abandon, demolish real property

    Contest, compromise, settle claims Employ agents or delegate authority

    Distribute up to $10,000 due to a minor to parent or Keep funds uninvested

    adult with custody

    Make distributions on behalf of minor to custodian Pay debts barred by SOL or bankruptcy discharge under UTMA

     Lend personal funds to estate or advance funds to



    Self Dealing Remedies for Statute of Liability on K Liability in Tort for

    Prohibitions Breach of Limitations Trustee AND Fiduciary Duties Employees

    Buying/selling Action to remove Begins to run when Personally liable ALWAYS GET

    assets to himself trustee UNLESS K INSURANCE

     (1) T repudiates the relieves of Borrowing trust

    AND trust by denying its liability YES funds (relatives

     existence as to or business

    Ratify and particular assets If sign “T, as entity included)

    WAIVE breach trustee of Brian Profit from

     OR Trust” service (except

    OR compensation)

     (2) Dies or resigns NOT IF sign “T,

    Surcharge action as trustee and not

    for resulting loss OR individually” OR

     “Brian Trust, by

    (3) Gives T, trstee” If breach

    accounting that involves self-

    alerts beneficiaries dealing, NO

    of conduct FURTHER Corporate Reimbursement? Reimbursement? INQUIRY trustee RULE (good CANNOT buy K was within Was acting within his

    faith or its own stock as power powers when tort was

    reasonableness investment committed

    is NO AND Duty to

    DEFENSE AND segregate trust

    Acting in course assets from

    of proper personal assets

    administration of Not personally at fault Loans TO trust Interest must

    trust returned

Security interests

    are invalid

    Investment Prudent Investor Rule: T must make investments as would be acquired by a prudent

    Losses man of discretion and intelligence . . . seeking reasonable income and preservation of


T with special skills (Bank) held to higher standard

Prudence is measured at time investment was made

Need custom made investment strategy

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