Trusts (bar exam) Exam Questions
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1. What happens when the beneficiary of a Totten trust
predeceases the depositor? - ANS ✓automatic revocation
2. inter vivos trusts - rules - ANS ✓-oral inter vivos trusts of
personality are enforceable provided its terms can be established by
clear and convincing evidence
-trusts containing land (whether created by declaration of trust or by inter
vivos transfer) must be evidenced by a writing that satisfies the Statute of
Frauds
-cannot have an oral trust of land
3. a constructive trust may be imposed where: - ANS ✓-fraud in
inducement: no intention to perform promise
-confidential relationship: grantee-trustee served in confidential
relationship to the grantor-settlor
4. What happens if the beneficiary of a trust performs services in
compliance with trust conditions, and the trust does not fulfill a
promise (which served as consideration for those services)? -
ANS ✓the beneficiary can sue in quantum merit for the VALUE OF
HER SERVICES
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5. Oral Promise (Supported by Consideration) to make Devise in
Will - ANS ✓-majority rule: if it is a contract to devise land, it is
subject to the Statute of Frauds → MUST be in writing
-UPC: contract to make a WILL, not to revoke a will, or to die intestate, can
only be shown IF
1) the terms are in the will itself
2) the terms are in a written contract OR
3) the will refers to the contract and extrinsic evidence proves the terms
-NOTE: the mere existence of joint or mutual wills does not imply a
contract not to revoke
6. testamentary trusts - ANS ✓-secret trusts
-semi-secret trusts
7. secret trusts - ANS ✓-absolute devise by will with oral promise to
hold on trust
-testimony is admissible to show the existence of a promise
-have to establish the promise by clear, satisfactory and convincing
evidence (more than a preponderance) → a constructive trust will be
implied
-when a will is involved, the Statute of Frauds is inapplicable
-A constructive trust is imposed to prevent unjust enrichment
-a note accompanying the will could also create a constructive trust
8. Semi-Secret Trust - ANS ✓devise "in trust" with oral agreement as
to beneficiaries
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9. 4 Distinctive Rules that Apply to Charitable Trusts - ANS ✓1) Not
subject to either Rule Against Perpetuities or Rule Against
Accumulations (can last and accumulate income perpetually)
2) Must be for Charitable Purpose
3) must be in favor of a reasonably large number of unidentifiable
beneficiaries
4) when specific charitable purpose can no longer be accomplished, may be
reformed under the doctrine of cy press (old French for "as near as
possible")
10. charitable purpose - critical question - ANS ✓-how does the
trust operate in fact? → MUST have a valid mechanism to ensure the
money goes toward a charitable purpose
-no mechanism = no trust
11. preference clauses and charitable trusts - ANS ✓when there
is a preference clause, the preference is problematic IF relatives only
experience the benefits
12. Who has standing to enforce a charitable trust? - ANS
✓state attorney general
settlor and any living beneficiary (under UTC)
13. main considerations when specific charitable purpose can
no longer be accomplished (cy press) - ANS ✓primary intent: have
to understand settlor's mindset
specific direction: this comes from the instrument
14. specific direction (rule + elements) - ANS ✓rule: if adhering
to specific direction would frustrate the primary purpose of the trust,
Trusts (bar exam)
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