Wills, Trusts, and Probate Law Chap 8

Constructive trust

another example of an implied trust; it is established by operation of law for equitable (or fairness) purposes

Cy pres doctrine

“as near as possible”
allows for modification of the trust when the settlor’s original intent is frustrated

Declaration of trust

a written document creating a trust in which the settlor is the sole trustee

Estate tax

represents tax liability based on the value of the decedent’s estate that exceeds the limits set by the taxing authority

Express trust

trusts which have been created by the grantor intentionally, usually by a written trust instrument signed by the grantor or grantor’s agent

Gift tax

tax liability based on a gift that has a value that exceeds the annual or lifetime limits set forth by the taxing authority

Implied trust

trusts that arise based on the nature of the transactions, facts and circumstances, and the conduct of the parties

Incidents of ownership

the grantor of a revocable trust can control the trust property, sell it, give it away, and determine how it is managed or invested

Living trust/Inter vivos trust

a trust that becomes effective while the grantor is alive

Irrevocable trust

A trust that generally cannot be altered, changed, modified or revoked after its creation, with some recent exceptions

Revocable trust

a trust created during the lifetime of the grantor and this type of trust explicitly states that it can be modified or revoked entirely

Settlor

the person who creates the trust

Testamentary trust

a trust created by a testator in his/her will and takes effect after the grantor has passed away

Trust agreement

a written contract between the settlor and the trustee to create and direct the operations of the trust

Trust property

Property or assets set aside in a trust or for special purposes

Trust

An arrangement by which one person, the trustee, holds legal title to property for the benefit of another, the beneficiary

Trustee

a person who holds legal title to property for the trust beneficiary

Beneficiary

a person who is designated in a will or trust to take an interest in real or personal property