Trust Creation, Elements and Types: every key term you need (+ practice quiz)
25 flashcard terms for Wills and Trusts Topic 6, written to match the course framework. Study them here, then drill them as interactive flashcards, or test yourself with the 15-question quiz — free, no account needed.
A fiduciary relationship deliberately created in which a trustee holds legal title to identified property for the benefit of ascertainable beneficiaries who hold equitable title.
Settlor
The person who creates a trust by transferring property to a trustee or by declaring himself trustee, and whose intent controls the terms unless a rule of law forbids the provision.
Trustee
The fiduciary holding legal title, charged with administering the property according to the terms and with the duties of loyalty, prudence, impartiality, and full disclosure to beneficiaries.
Beneficiary
The holder of equitable title who is entitled to enforce the trust, receive distributions according to its terms, and demand an accounting of the trustee's administration.
Trust res
The identifiable property held in trust, which must exist at creation because a trustee cannot hold title to a mere expectancy or an unfulfilled promise to transfer assets.
Intent to create a trust
The manifestation of a purpose to impose enforceable duties on a holder of property, which need not use the word trust and is defeated by merely precatory expressions of hope.
Precatory language
Words of wish, request, or recommendation that ordinarily create no enforceable obligation, though context such as a detailed plan may convert them into a binding trust.
Declaration of trust
A trust created when the owner declares that she holds property for another, which needs no delivery because the settlor already possesses the legal title.
Deed of trust transfer
The creation of a trust by conveying property to a third party as trustee, requiring the delivery formalities appropriate to the kind of asset being transferred.
Ascertainable beneficiary requirement
The rule that a private trust must have beneficiaries who can be identified so that someone can enforce the trustee's duties in court, with charitable trusts exempt from the requirement.
Honorary trust
An arrangement for a noncharitable purpose with no human beneficiary, such as maintaining a grave, which the trustee may but is not compelled to perform under the older rule.
Pet trust
A statutory noncharitable purpose trust authorized by the Uniform Trust Code for the care of animals living during the settlor's lifetime, enforceable by a person the court appoints.
Revocable trust
A trust the settlor may amend or terminate, presumed revocable under the Uniform Trust Code, used chiefly as a will substitute that avoids probate and provides for incapacity.
Irrevocable trust
A trust the settlor cannot unilaterally undo, used to remove assets from the taxable estate, shelter property from creditors, and lock in a long-term dispositive plan.
Testamentary trust
A trust created by will that takes effect at death, subject to probate administration and often to continuing court supervision in states that have not curtailed the practice.
Pour-over will
A will directing the residue into an existing or contemporaneously executed trust, validated by uniform legislation even though the trust terms may be amended after the will is signed.
Mandatory trust
A trust requiring the trustee to distribute all income or specified amounts to named beneficiaries, leaving no discretion and giving the beneficiary an enforceable right to payment.
Discretionary trust
A trust giving the trustee power to decide whether, when, and how much to distribute, so a beneficiary has only an expectancy that creditors ordinarily cannot reach.
Support trust
A trust limiting distributions to the beneficiary's health, education, maintenance, and support, an ascertainable standard that both guides the trustee and limits creditor access.
Spendthrift clause
A provision barring a beneficiary from assigning the interest and blocking creditors from attaching it before distribution, valid in almost every state as to interests the settlor gave another.
Exception creditor
A claimant such as a child owed support, a former spouse, or in many states a supplier of necessities or the government, who may reach a spendthrift interest despite the clause.
Self-settled asset protection trust
An irrevocable trust in which the settlor is also a beneficiary, unenforceable against creditors under traditional law but permitted by statute in a growing number of states.
Resulting trust
An implied reversionary trust returning property to the settlor or the settlor's estate when an express trust fails, is fully performed, or leaves an undisposed surplus.
Constructive trust
An equitable remedy, not a real trust, compelling a person who obtained property through fraud, breach of duty, or other unjust enrichment to convey it to the rightful claimant.
Secret trust
An absolute devise on the face of the will made in reliance on the devisee's promise to hold for another, enforced through a constructive trust once the promise is proved.