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Question 1
Summer decides to create a trust, for the benefit of her niece, Samantha. She writes, "I hereby declare myself trustee of my Palm Springs, CA home for Samantha." A valid trust is created.
Correct To establish a trust, there must be an immediate, present transfer of the trust res to the trustee. Here, Summer's declarative statement that she is holding the home as trustee for Samantha establishes a present transfer. As such, a valid trust is created.
Incorrect! To establish a trust, there must be an immediate, present transfer of the trust res to the trustee. Here, Summer's declarative statement that she is holding the home as trustee for Samantha establishes a present transfer. As such, a valid trust is created.
Correct
Incorrect!
Question 2
Brock is planning to establish a trust, for the benefit of his nephew, Carson. He executed and delivered a power of attorney to his lawyer, Thierry (the proposed trustee), by which title to the trust res could be transferred by his agent, Thierry. A valid trust is created.
Correct
Incorrect!
Correct To establish a trust, there must be an immediate, present transfer of the trust res to the trustee. Here, Brock transferred only a power of attorney (a mere agency), which is not equivalent to transferring the trust res to the trustee. Besides, this power could be revoked before the title was actually vested in the trustee. As such, a valid trust was not created. See, e.g., Farmer's Loan & Trust Co. v. Winthrop, 238 N.Y. 477 (1923).
Incorrect! To establish a trust, there must be an immediate, present transfer of the trust res to the trustee. Here, Brock transferred only a power of attorney (a mere agency), which is not equivalent to transferring the trust res to the trustee. Besides, this power could be revoked before the title was actually vested in the trustee. As such, a valid trust was not created. See, e.g., Farmer's Loan & Trust Co. v. Winthrop, 238 N.Y. 477 (1923).
Question 3
Michael promises Maggie in writing that if she marries him he will convey a home in Tampa, FL in trust for Maggie's mother. Michael marries Maggie. A valid trust is created.
Correct A valid inter vivos trust may be based on a promise enforceable under contracts law. To be effective, though, consideration is needed to make the promise binding and enforceable. Here, a valid trust arises, but the effective date can vary. The trust could arise at the marriage date or when Michael makes the conveyance to his new mother-in-law. Regardless of the date, Michael's promise is enforceable in equity or at law.
Incorrect! A valid inter vivos trust may be based on a promise enforceable under contracts law. To be effective, though, consideration is needed to make the promise binding and enforceable. Here, a valid trust arises, but the effective date can vary. The trust could arise at the marriage date or when Michael makes the conveyance to his new mother-in-law. Regardless of the date, Michael's promise is enforceable in equity or at law.