chaps 7,8,9 review terms

Post-mortem conception

Conception of a child that occurs after a purported parent has died, often through in vitro fertilization. Example: A couple stored embryos before a parent passed away, resulting in post-mortem conception when the embryos were used later.

Uniform Transfer to Minors Act

A legal provision allowing minors to receive gifts without a formal trustee to manage the property until they reach the age of majority. Example: An aunt gives money to her nephew under this act, which he can access when he turns 18.

Equitable Adoption

A legal concept recognizing the rights of a child in informal or non-legal adoptions under certain circumstances. Example: A child raised by a close family member may have rights as if adopted, even without formal procedures.

In Loco Parentis

A Latin term meaning 'in the place of a parent,' referring to someone who takes on parental duties without formal adoption. Example: A stepparent who raises their partner's child can be considered in loco parentis.

Revocable Trust

A trust that can be altered or revoked by the trustor during their lifetime. Example: A person sets up a revocable trust, allowing them to change beneficiaries or revoke it as needed.

Fiduciary Trust

A trust where the trustee has a legal obligation to act in the best interests of the beneficiaries. Example: A family member managing a trust for minors must ensure that the beneficiaries' interests are prioritized.

Implied Trust

A trust created by the courts rather than explicitly stated by the trustor. Example: A court may impose an implied trust if one party unjustly benefits from another's property.

Constructive Trust

A trust imposed by a court to address wrongdoing or unjust enrichment. Example: If someone fraudulently obtains property, a court may create a constructive trust to return the property to its rightful owner.

Pour Over Will

A will directing the transfer of a decedent's assets into a previously established trust upon death. Example: A person leaves their estate to their trust, ensuring proper management after death.

Irrevocable Trust

A trust that cannot be modified or terminated without the permission of the beneficiary. Example: Once assets are placed in an irrevocable trust, the trustor cannot reclaim them without consent.

Expressed Trust

A trust explicitly created by the trustor's declarations. Example: A person writes a document establishing their expressed trust to manage their assets.

Resulting Trust

Arises when the trustor inadvertently does not properly transfer property into a trust. Example: If property intended for a trust is mistakenly left out, a resulting trust may be claimed by the intended beneficiaries.

Testamentary Trust

A trust created as part of a will that comes into effect upon the death of the testator. Example: An individual creates a testamentary trust for their children, which only starts operating after their death.

Life Insurance Trust

A trust designed to hold life insurance policies, allowing for tax benefits and control over policy benefits. Example: A person places their life insurance policy in a life insurance trust to avoid estate taxes.

Discretionary Trusts

A trust that gives the trustee discretion to determine distributions to beneficiaries. Example: A discretionary trust allows the trustee to decide how much money a beneficiary receives based on their needs.

Spendthrift Trusts

A trust that protects a beneficiary's interest from creditors by preventing them from transferring their interest in the trust. Example: A spendthrift trust prevents creditors from claiming a beneficiary’s trust payouts.

Sprinkling or Spray Trusts

A trust that allows for the distribution of assets among multiple beneficiaries in varying amounts at the discretion of the trustee. Example: A trustee may sprinkle funds to different family members based on their individual needs.

Special Needs Trust

A trust created to provide for a disabled beneficiary without jeopardizing their eligibility for government assistance. Example: A special needs trust provides for a disabled person’s care without affecting their government benefits.

Trustor

The individual or entity that creates the trust. Example: A parent establishes a family trust for their children.

Trustee

The person or entity appointed to manage the trust assets and administer the trust. Example: A trusted family friend serves as the trustee of a family trust.

Beneficiary

The individual or group that receives benefits from the trust. Example: The child listed as a beneficiary in a parent's trust benefits from the trust assets.

Trust Purpose

The specific goals or directives stated by the trustor in establishing the trust. Example: A trust may be created to fund a child's education.

Corpus

Also known as trust property, represents the assets held within the trust. Example: The house, investments, and cash in the account make up the corpus of the trust.