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The Law of Trusts

Table of contents
Chapter One. The Capacity to Create a Testamentary Trust
1.1 - Parties Involved in a Trust Arrangement
1.2 - Testamentary Capacity
1.2.1 - Mental Capacity
1.2.2 - Insane Delusion
1.2.3 - Undue Influence
1.2.4 - Fraud and Duress
Chapter Two. Creation of a Private Trust
2.1 - Intent to Create a Trust
2.2 - Requirement of Trust Property
2.3 - Necessity of Trust Beneficiaries
Chapter Three. Categories of Private Trusts
3.1 - Private Expressed Trusts
3.1.1 - Inter vivos Trusts vs. Testamentary Trusts
3.1.2 - Totten/Tentative Trust
3.2 - Trusts Created By Operation of Law
3.2.1 - Resulting Trust
3.2.2 - Constructive Trust
3.2.3 - Honorary Trusts
Chapter Four. Discretionary and Support and the Rights of the Beneficiary’s Creditors
4.1 - Discretionary Trusts
4.2 - Support Trust
Chapter Five. Spendthrift Trusts and Creditors
5.1 - Expressed Spendthrift Trust
5.2 - Implied Spendthrift Trust
5.3 - Creditors
Chapter Six. Modification and Termination of Trusts
6.1 - Termination
6.2 - Claflin and Material Purpose
6.3 - Deviation and Changed Circumstances
6.4 - Removal of the Trustee
Chapter Seven. Creation and Modification of Charitable Trusts
7.1 - Creation of the Charitable Trust
7.2 - Modification/Cy Pres
Chapter Eight. Supervision/Enforcement of Charitable Trusts
8.1 - Donor Standing
8.2 - Beneficiary Standing
Chapter Nine. Treatment of Trust Property
9.1 - The Duty to Collect and Protect Trust Property
9.2 - The Duty to Earmark Trust Property and to Not Comingle Trust Funds
9.3 - The Duty Not to Delegate
9.4 - Duty of Prudence
Chapter Ten. Duty of Loyalty
Chapter Eleven. Duty of Impartiality
Chapter Twelve. Duty to Account and Inform
12.1 - To Account
12.2 - To Inform
12.3 - The Trustee’s Liability
Chapter Thirteen. Power of Appointments
The Law of Trusts
1st Edition
Browne C. Lewis
Table Of Contents
  • Introduction - The Law of Trusts
  • Chapter One - The Capacity to Create a Testamentary Trust
    • 1.1 - Parties Involved in a Trust Arrangement
    • 1.2 - Testamentary Capacity
      • 1.2.1 - Mental Capacity
      • 1.2.2 - Insane Delusion
      • 1.2.3 - Undue Influence
      • 1.2.4 - Fraud and Duress
  • Chapter Two - Creation of a Private Trust
    • 2.1 - Intent to Create a Trust
    • 2.2 - Requirement of Trust Property
    • 2.3 - Necessity of Trust Beneficiaries
  • Chapter Three - Categories of Private Trusts
    • 3.1 - Private Expressed Trusts
      • 3.1.1 - Inter vivos Trusts vs. Testamentary Trusts
      • 3.1.2 - Totten/Tentative Trust
    • 3.2 - Trusts Created By Operation of Law
      • 3.2.1 - Resulting Trust
      • 3.2.2 - Constructive Trust
      • 3.2.3 - Honorary Trusts
  • Chapter Four - Discretionary and Support and the Rights of the Beneficiary’s Creditors
    • 4.1 - Discretionary Trusts
    • 4.2 - Support Trust
  • Chapter Five - Spendthrift Trusts and Creditors
    • 5.1 - Expressed Spendthrift Trust
    • 5.2 - Implied Spendthrift Trust
    • 5.3 - Creditors
  • Chapter Six - Modification and Termination of Trusts
    • 6.1 - Termination
    • 6.2 - Claflin and Material Purpose
    • 6.3 - Deviation and Changed Circumstances
    • 6.4 - Removal of the Trustee
  • Chapter Seven - Creation and Modification of Charitable Trusts
    • 7.1 - Creation of the Charitable Trust
    • 7.2 - Modification/Cy Pres
  • Chapter Eight - Supervision/Enforcement of Charitable Trusts
    • 8.1 - Donor Standing
    • 8.2 - Beneficiary Standing
  • Chapter Nine - Treatment of Trust Property
    • 9.1 - The Duty to Collect and Protect Trust Property
    • 9.2 - The Duty to Earmark Trust Property and to Not Comingle Trust Funds
    • 9.3 - The Duty Not to Delegate
    • 9.4 - Duty of Prudence
  • Chapter Ten - Duty of Loyalty
  • Chapter Eleven - Duty of Impartiality
  • Chapter Twelve - Duty to Account and Inform
    • 12.1 - To Account
    • 12.2 - To Inform
    • 12.3 - The Trustee’s Liability
  • Chapter Thirteen - Power of Appointments
Introduction
The Law of Trusts

 

 

The Law of Trusts

 

 

 

 

Browne C. Lewis

Associate Professor
Leon and Gloria Plevin Professor of Law & Director, Center for Health Law & Policy
Cleveland-Marshall College of Law, Cleveland State University

 

 

 

eLangdell® Press 2013

Introduction.1. About the Author

Professor Lewis graduated number one in her class with a degree in Political Science from Grambling State University. Prior to attending law school, Professor Lewis received summer fellowships to study at Carnegie-Mellon University, the Hubert H. Humphrey Institute at the University of Minnesota and the John F. Kennedy School of Government at Harvard University.  

Professor Lewis started her professional career as a statistician and ADR trainer at the Conflict and Change Center in Minneapolis, Minnesota. Then, she clerked for the Honorable Daniel Wozniak, Chief Judge of the Minnesota Court of Appeals. Professor Lewis practiced in the areas of environmental, elder, family, housing and probate law. Professor Lewis spent most of her career working as a legal services attorney.

Professor Lewis is the Leon & Gloria Plevin Professor of Law and the Director of the Center of Health Law & Policy at Cleveland-Marshall College of Law. Prior to joining the faculty at Cleveland-Marshall, Professor Lewis was an associate professor at the University of Detroit Mercy School of Law, a visiting professor at the University of Pittsburgh School of Law, a summer visiting professor at Seattle University School of Law and a legal writing instructor at Hamline University School of Law. Professor Lewis has also taught in the American Bar Association CLEO Summer Institute.

Lewis is a member of the American Society of Law, Medicine & Ethics, the Health Care Compliance Association, the Public Health Law Association and the American Health Lawyers' Association. Professor Lewis is also a public member of the Board of the Joint Commission and a member of Cleveland State University's Institutional Review Board (IRB).

Professor Lewis writes in the areas of environmental, family and reproductive law. Her next most recent article on surrogacy and maternity is forthcoming in the St. John’s Law Review. Professor Lewis has recently completed a book on paternity and artificial insemination for New York University Press. In 2010, Professor Lewis' casebook on the inheritance rights of children was published by Carolina Academic Press.

Introduction.2. Notices

This is the first version of this casebook. Visit http://elangdell.cali.org/ for the latest version and for revision history.

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Introduction.4. Preface

Recently, the public waited patiently to find out the contents of Whitney Elizabeth Houston’s will. People were entertained by her music and fascinated by her death. Thus, it is no surprise that they were on the edge of their seats to discover how much money she had in her estate. Inside Edition and other entertainment shows teased the public with previews stating that they had received a copy of the will and planned to reveal its contents. The big reveal fell short when the public realized that Houston had left everything to her daughter using a testamentary trust. Wills are public documents, but trust instruments are not. Therefore, the public will never know the specific provisions contained in the trust document. Privacy is one of the reasons why more and more people are disposing of their property using testamentary trust created in their wills. The reasons people establish trusts are as varied as the lawyers who draft them. Traditionally, trusts were vehicles wealthy people used to provide for their love ones. Currently, people from all economic classes establish trusts.  Thus, for students desiring to practice in the probate or elder law arena, it is crucial that they have a basic understanding of the law of trusts.

The standard four-credit Wills & Trusts courses taught at most law schools do not spend a sufficient amount of time on the law of trusts. Professors teaching such courses have the daunting task of teaching intestacy, wills, non-probate transfers, estates, and trusts. The semester is not long enough to give detail coverage to all of the important topics. Consequently, professors have to decide what material to omit. Typically, the material on the law of trusts is either omitted or severely shortened. One obvious reason for the treatment of the trust information is the fact that the chapters on trusts are in the latter part of most casebooks. It is difficult to predict the pace at which the material will be covered.  Thus, most professors have to adjust their reading assignments. Those adjustments usually require the professors to cut assigned materials. Frequently, by the time the decision to reduce the reading assignments needs to be made, the only significant material left to be covered are the chapters on the law of trusts. Hence, that material is routinely omitted.

The use of testamentary trusts is becoming an important part of estate planning. As a result, students who want to make a living as probate attorneys will need to know how trusts fit into estate planning. In addition, bar examiners realize that it is important for students to have a basic knowledge of trust law. That realization will result in bar examination questions that test that knowledge. The Law of Trusts is designed for use as a supplementary text for a course on wills and trusts and the primary text in a seminar or course exploring the law of trusts.

Since the settlor is dead when the testamentary trust becomes effective, the testamentary trust is an irrevocable trust. The main focus of this book is on that type of trust. However, the revocable inter vivos trusts will be briefly mentioned as it relates to the testamentary trusts. Most of the legal issues surrounding the law of trusts come from challenges to the creation and implementation of the trusts. In addition, even if the testamentary trust is deemed to be valid, the actions of the trustee may lead to litigation. This book is divided into two components to address the issues that arise in those two types of litigation.

Part I explores the legal issues involved in the creation, modification and implementation of private and charitable trusts. In order to have a trust invalidated, the opponent must successfully challenge the capacity of the settlor or the procedure used to create the trust. Part I contains a chapter that examines the level of mental ability a person must have to create a trust. Other chapters in this part explains the steps that must be taken to create, modify and terminate a trust and compares the various types of private trusts.

Part II discusses the administration of private and charitable trusts. In particular, the part focuses upon the numerous duties of the trustee. Trusts are usually created to protect a person who is vulnerable in some way. In a lot of respects, that person is at the mercy of the trustee. Any decision that the trustee makes, good or bad, directly impacts the beneficiary.  In order to protect the beneficiary from the actions of the trustee, the law imposes a fiduciary duty on the trustee. Chapters in Part II analyze the trustee’s duties and the remedies available to the beneficiary in the event of the trustee’s breach of any of those duties. Part II also includes a discussion of powers of appointments and their relevancy to trusts. This discussion is necessary because bar examinations frequently contain questions dealing with powers of appointment.

In additional to cases, the book contains problems, notes and questions. The cases are designed to give the student a clear understanding of the law. The problems are included to permit the student the opportunity to apply the law. The notes and questions are provided so the student will think critically about the policies behind the law and the outcome of the cases.

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