Charitable Trusts, Powers of Appointment and Nonprobate Transfers: every key term you need (+ practice quiz)
25 flashcard terms for Wills and Trusts Topic 8, 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 trust for a purpose the law regards as beneficial to the community, exempt from the ascertainable beneficiary requirement and from the Rule Against Perpetuities so it may last forever.
Charitable purpose categories
The recognized headings of relief of poverty, advancement of education, advancement of religion, promotion of health, governmental purposes, and other purposes benefiting the community at large.
Benevolent purpose problem
The difficulty that a gift for benevolent or worthy objects may sweep in noncharitable aims, which can defeat charitable status and leave the trust unenforceable for want of a beneficiary.
Cy pres doctrine
The rule allowing a court to redirect a charitable trust to a purpose as near as possible to the settlor's original one when the stated purpose becomes impossible, impracticable, or wasteful.
General charitable intent
The finding, presumed under the Uniform Trust Code, that the settlor cared about charity broadly rather than only about one named organization, which is the predicate for applying cy pres.
Attorney general enforcement
The mechanism by which charitable trusts are policed, since no private beneficiary exists, sometimes supplemented by standing for settlors or persons with a special interest.
Supervision of charitable dispositions
The set of registration, reporting, and audit requirements state statutes impose on charitable trustees and foundations to detect diversion of dedicated funds.
Power of appointment
The authority granted by a donor to a donee to designate who will receive property, a device that injects flexibility into a plan drafted long before the facts are known.
Donor of a power
The person who creates a power of appointment in an instrument, defines its scope and permissible objects, and designates the takers in default of exercise.
Donee of a power
The person given authority to appoint the property, who holds no ownership interest in the classic view and owes no fiduciary duty when the power is personal.
Permissible appointees
The class of persons to whom the donee may appoint, called the objects of the power, whose boundaries determine whether an attempted appointment is effective.
Takers in default
The persons designated to receive the property if the power is never validly exercised, who hold a vested interest subject to divestment by an effective appointment.
General power of appointment
A power exercisable in favor of the donee, the donee's estate, the donee's creditors, or creditors of the estate, treated as the practical equivalent of ownership for tax and creditor purposes.
Nongeneral power of appointment
A power limited to a class that excludes the donee, the donee's estate, and both sets of creditors, which keeps the property outside the donee's taxable estate.
Presently exercisable power
A power the donee may exercise during life at any time, contrasted with a testamentary power that can be exercised only by the donee's will.
Blanket exercise clause
Residuary language purporting to exercise any power the testator may hold, effective in some states but insufficient where the donor required a specific reference to the power.
Specific reference requirement
A donor-imposed condition that the donee's exercise identify the power expressly, designed to prevent inadvertent exercise by boilerplate residuary language.
Fraud on a special power
An attempted appointment to a permissible object under an arrangement that in substance benefits a nonobject, which courts strike down as beyond the scope of the power.
Rule Against Perpetuities
The rule invalidating a contingent future interest unless it must vest or fail within twenty-one years after the death of a person alive when the interest was created.
Wait and see approach
The reform that judges validity by what actually happens during the permitted period rather than by remote possibilities imagined at the moment of creation.
Uniform Statutory Rule Against Perpetuities
The reform statute validating an interest that either satisfies the common law rule or in fact vests or terminates within ninety years of creation.
Perpetual trust legislation
Statutes in many states abolishing or greatly extending the perpetuities period for trusts, driven by competition for trust business and by generation-skipping transfer tax planning.
Payable on death designation
A contractual beneficiary designation on a bank or brokerage account transferring the balance at death outside probate, validated by modern statutes despite lacking will formalities.
Joint tenancy with right of survivorship
A concurrent ownership form in which the survivor takes the whole automatically at death, a will substitute that cannot be altered by the decedent's will.
Transfer on death deed
A recorded revocable instrument authorized by uniform legislation that passes real property at the owner's death without probate while leaving full ownership during life.