Trusts

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Author:
BlasterGirl
ID:
163333
Filename:
Trusts
Updated:
2012-07-20 20:29:21
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Trusts
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Trusts
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  1. I. RESULTING TRUST
    II. CONSTRUCTIVE TRUST
    Q1: What kind of trusts are these/how are they formed?
    Q2: When does Resulting Trust arise?
    Q3: When does Constructive Trust arise?
    • Both: Implied by law where no valid express declaration of trust or when no trust intended at all. 
    • Note: SOF is inapplicable!
    • Resulting: Involved resversionary interests and based on presumed intent of Settlor.
    • Constructive: Used to prevent unjust enrichment
  2. I. RESULTING TRUSTS:
    A. Purchase Money Resulting Trusts
    B. Resulting Trust on Failure of Express Trust
    C. Resulting Trust Implied from Excess Corpus (Incomplete disposition of trust assets)
    • PMRT: Presumed when B (beneficiary) furnishes consideration to acquire real/pers prop but it's titled in X's (Trustee) name.
    •      1. Timing: Consideration furnished AT or BEFORE X takes title.
    •      2. BOP: B must prove by C&C evid he supplied consideration.
    •      3. Rebut Presump: Once B proves he provided consid, resulting trust is presumed. X may rebut by showing no trust intent (payment was gift/loan/debt).
    •      4. EXCEPT: NO trust presumed ifclose personal r-ship; rather, gift presumed; rebuttable.
    •      5. Fraud: NO resulting trust; rather, constructive trust. 
    • RT on Fail Exp T: S conveyed prop to trustee under express trust and (i) trust void/unenforceable, or (ii) B dead or cannot be located, or (iii) charitable trust fails and cy pres N/A.
    •      1. Effect: Exp T terminates & S becomes B in RT.
    •      2. RT NOT Implied: (i) trust instrument specifically or implicitly provides for disposition of res when T fails or complete, (ii) S given consid for orig transfer in T, (iii) S created T for illegal purpose, (iv) cy pres applicable.

    RT Implied Excess Res: In favor of S when T purpose fully satisfied and res remains.
  3. II. CONSTRUCTIVE TRUSTS
    Q1: What is a CT?
    Q2: What is T'ee duty?
    Q3: BOP?
    • A1: An equitable remedy to prevent unjust enrichment.
    • A2: Convey the prop to the person who would have owned it but-for the wrongful conduct.
    • A3: C&C evid
  4. CONSTRUCTIVE TRUSTS ARISING FROM:
      (1) Theft
      (2) Fruad
      (3) Breach Fid Duty
      (4) Homicide
      (5) Breach Promise
    Theft/Conversion: Y steals from X. Title remains in X. But if Y uses prop to acquire other items, he takes those items in CT for X.

    Fraud/Duress/Mistake Fact: Y acquires by, holds in CT for X's benefit. If conveyed to 3P not BFP, 3P is Constructive T'ee. If Y innocent party taking under forged/fraudulent will, he is CT'ee for rightful inheritor.

    Breach Fid Duty: Fid Duty forbids taking title to prop belonging to B and from seizing opportunities for self. If breached, CT'ee in favor of whom the duty is owed

    Homicide: If you kill someone, you can't get their shit. You hold in CT for the heirs of the person you offed. 

    Breach Promise: General Rule: NO CT. Exceptions: (1) fraudulent promise (P'or never intended to keep), (2) Breach Promise by one in confidential r-ship, (3) breach by decedent's devisee or heir to hold prop for 3PB, (4) breach by decedent to devise prop to one rendering services in reliance thereon, (5) breach to debtor by buyer at foreclosure sale to hold prop for D, causing D to forgo bidding.
  5. OBLIGATIONS OF CONSTRUCTIVE/RESULTING TRUSTEE:  
    (Q1) Three Duties (two affirmative, one non-duty)
    (Q2) Application of Equitable Principles: When they do and do not apply. 
    • A1:
    • (1) Convey prop to rightful B,
    • (2) Account for profits received from prop from time of wrongful act (or FMrentalV of use of prop since wrong act),
    • (3) NO DUTY to invest.

    • A2:
    • Rule: Adequate remedy at law bars equity N/A! EXCEPT: for breach oral promise to make will or hold prop (then law remedies are adequate and bar equitable remedies). 

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