Notes 4/23

Know the difference between probate and non-probate assets for TEST!!
Tuesday, April 23, 2013 1:01 PM

Chapter 29 Constructive and Resulting Trusts cont. and RAP Statute and Review
Notes and questions (p.647)

(1) Exculpatory clauses? 736.1011(1) exculpatory clause is unenforceable to the extent it: o (a) relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference (2) Would a successor trustee be liable for actions of a predecessor trustee? o See Fla. Stat. 736.0812 and 736.08125

Successor Trustees

Fla. Stat. 736.08125(1) o (a) protects a successor trustee when the trust was revocable and the settlor was serving as the prior trustee With regard to other situations: successor trustee is protected: o (1)(b) as to beneficiary who waived an accounting o (1)(c) if a beneficiary released him; and o (1)(e)if a super majority of the eligible beneficiaries don't initiate within 6 months

Constructive Trusts

Remedy Generally need to show: breach of a promise (express or implied), a transfer of property in reliance on that promise, that the transferor and the transferee were in a confidential relationship [Transaction induced by the relationship], and unjust enrichment Fraud in the inducement; undue influence; or duress o Confidential relationship - ex. lawyer/client, doctor/patient, any fiduciary relationship o Confidential relationship between transferor and transferee (fiduciary capacity/family relationship) & [Transaction induced by the relationship] led to unjust enrichment] Allen v. Dalk (p.661) - goes to show that you can't always get the court to do a constructive trust o Testatrix by mistake failed to sign her name to her Will o Because there was no fraud, the court said NO to constructive trust

Wodonos v. Wodonos

Deed to portion of real property (apartment complex in Miami Beach) only named transferor's daughter (plaintiff's wife) as the transferee Plaintiff (son-in-law) asserts the transfer was actually intended to be a trust for the benefit of both him and his wife (oral trust) Trust failed as express trust - 689.05 Plaintiff tried to argue constructive trust, but the court says NO

Williams v. Grogan

Mom excecutes a will - Dec. 1953 devising real property to others (son didn't know about this will) Jan. 1954 Charlie transfers land inherited from his dad to his Mom for safekeeping She didn't tell him about her will leaving the property to OTHERS She was supposed to die Intestate so son would get back the land he had inherited from his dad Court imposed a constructive trust for the portion of the land that was originally given to the son

Mayer v. Cianciolo

Mother and son own title to Key Largo real property as JTs with right of survivorship 1981 mother takes ill and son quit claims his interest in Key Largo house to her so she can sell it Mother executes a Will leaving 1/2 to Watch Tower Bible society Constructive trust?

Resulting Trust

Generally either because trust failed or trust document did not fully dispose of all assets in the trust (like a remainder conceptually) o i.e. Charitable trust to Broward General Hospital but the hospital closes, if there was proof of a general charitable intent you could try to argue cy pres to give it to someone else o Assume can't use cy pres because settlor has clear intent to only benefit that hospital. Assume also that trust didn't name an alternate taker. o So who gets the remaining trust assets o Results back to settlor's etate because trust ends/fails

Purchase money Resulting Trust

Someone gives money for the purchase of real property but title is taken under someone else's name Lindsay gives $$ but Bob takes title All the money was put up by Lindsay but title was put in Bob's name Why would someone put up the money and yet allow someone else to get title? o Either it was really intended as a gift from Lindsay to Bob o OR o Bob is really a straw man (i.e. Lindsay is an actor and doesn't want paparazzi around) o Bob is supposed to give it to Lindsay when she requests it, Do a side document that says it is not a gift

RAP

689.225(2)(a)1 A nonvested property interest is invalid unless: 1. When the interest is created, it is certain to vest or terminate no later than 21 years after the death of an individual then alive (that is the common law rule) Now go to (2)(a)2 OR 2. the interest either vests or terminates within 90 years after its creation

Perpetuities Reform 689.225

689.225(2)(f) (f) trust created after Dec. 31, 2000 non-vested property interests by substituting 360 years [for 90] unless the terms of the trust req Note some exclusions RAP doesn't apply in FL to: (5)(a) - non-donative transfers (i.e. real estate purchase option) unless in listed exceptions (5)(e) - Charity to Charity exception

When are interests deemed created for purpose of RAP? (p.600-601)

Remember a will is created when the testator dies Testamentary Trust - interest created for RAP when trust is deemed created o When Will takes effect (at settlor/testator's death) Inter-vivos Trust o Irrevocable Inter-vivos Trust - interest created for RAP when trust is created When property delivered to trustee if by transfer or when trust property declared to be in trust if self-declared o Revocable Inter-vivos Trust - interest deemed created FOR RAP when trust becomes irrevocable (usually when settlor does) **** DIFF - When you can't change it Why? Property not tied up since settlor can revoke, so we aren't going to start counting the lives in being yet Remember for other purposes it is still created when it is created

Savings Clauses

Trust itself terminates and property distributed to then beneficiaries Ex. Of Revocable Trust Perpetuities Savings Clause Example 21 o Notwithstanding anything herein to the contrary, the trust shall terminate 21 years after the death of the last surving trust beneficiary living at the Settlor's death o So all interests necessarily vest or fail within 21 year of lives in being Trust itself terminates For example of inter vivos IRREVOCABLE TRUST - Ex. 22 o At the time the instrument becomes effective