Trusts and Estates Vocabulary

Flashcards covering key vocabulary and concepts related to trusts, including conflict of interest, living trusts, testamentary trusts, the role of a trustee, and the legal concept of merger.

Conflict of Interest

A situation where someone involved in a trust (trustee, beneficiary, or their relative) may have divided loyalties or personal interests that could compromise their impartiality.

Trustee Expertise

Trustee companies or experts are in charge of financial dealings because, unlike a settler, they have extensive experience in trust and investments.

Living Trust

A trust created and funded during the grantor's lifetime.

Testamentary Trust

A trust that is created within a will and comes into effect after the testator's death.

Mentally Unsound Trustee

A trustee who becomes mentally unstable is unfit to manage the trust.

Trustee Requirement

A trust requires a trustee to function; without one the trust ceases to exist.

Expectancy of Trust

The trust has to come about within a specific time frame.

The Statute of Frauds

Requires certain agreements, such as those involving land or property, to be in writing to be enforceable.

Merger (in Trust Law)

Occurs when the legal title and beneficiary (equitable) title merge into one, effectively terminating the trust because there is no longer a separation of ownership.

Legal Title

The right to actually manage and control the assets.

Equitable Title

The right to benefit from those assets.