Term
| what will courts look at to see if beneficiary has waited too long to sue? |
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Definition
length of time reason for delay change in circumstances has there been a change in position on the part of the trustee? |
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Term
| why is the ttee drafting exculpatory language himself a bad idea |
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Definition
| smells like self-dealing. |
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Term
| 3 types of cases heard in courts of law (as opposed to courts of equity) |
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Definition
breach of contract
tort claim
claim involving death |
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Term
2 exceptions to the rule that it's always best to sue based on equity not tort or breach of contract |
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Definition
- absolute cetain sum of money that is due the beneficiary (like the doc says that on such and such date the benny must be paid)
- Trustee is under such duty to convey chattel (personal property, such as a baseball card collection) to the benny.
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Term
| 5 general remedies given by the court of equity |
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Definition
- Specific performance
- demand injunction
- demand ttee reimburse the trust account
- demand the appointment of a receiver
- demand the removal of a ttee
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Term
| What if you ask an attorney for advice, and he makes a mistake and he tells you some bigtime wrong advice? |
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Definition
| nothing you can do because it's considered a mistake of law |
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Term
| When can you sue your attorney? |
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Definition
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Term
| Do the beneficiaries have priority over the other creditors of the trustee? |
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Definition
| Only if you can trace the trust property or trace the assets. |
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Term
| what doctrine determines how long a benny can wait to sue? |
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Definition
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Term
| what determines the legal rate? |
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Definition
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Term
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Definition
- selling something you shouldn't have sold
- fail to sell something you should have sole
- buying something you shouldn't have bought
- fail to buy something you should have bought
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Term
| Remedies if ttee sells something he sholdn't have sold |
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Definition
- charge the ttee with the value of the property at the time of the sale plus interest
- charge the ttee with the value at the time of the suit with the income that would have accrued
- compel the ttee to make specific reparation
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Term
| remedy if ttee fails to sell property that he should have sold |
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Definition
| force the ttee to pay the difference between what the property is now worth and what it could have been sold for if it had been sold in a reasonable time |
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Term
| what's the liability if ttee fails to purchase property that he should have purchased? |
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Definition
| the difference between what it was worth as of the day of the suit and what you could have purchased it for if you had purchased it within a reasonable time. |
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Term
| difference between being liable and accountable |
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Definition
- Liable = have to pay $ out of pocket
- accountable = ttee can't keep any excess gains earned on stock and must give to trust
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Term
| are multiple breaches considered part of the same transaction? |
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Definition
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Term
| Factors courts look at to determine if breaches are considered separate and distinct |
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Definition
- do the breaches relate to the same or different parts of the trust property?
- did the breaches arise out of successive dealings?
- how much time elapsed between the breaches?
- has there been an accounting between the breaches?
- how has the ttee dealt with the property between the breaches?
- did the ttee intend to misappropriate the property?
- are the breaches a result of a single policy on the part of the trustee?
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Term
| in successive dealings, are you liable for the ultimate loss, or the intermediate loss? |
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Definition
| usually the ultimate loss |
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Term
| in getting consent of beneficiaries, what's the ski rule and what's it say? |
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Definition
- SKI rule is Sui Juris (mentally competent and at least 18), Knowledge of all facts, not Induced by fraid, duress, or undue influence.
- ski rule's binding so long as all benny's are sui juris.
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Term
| in order to gain consent from beneficiaries, what must you do? |
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Definition
- You need to get a guardian ad litem to represent the interest of any unborn benny
- benny's must have knowledge of all facts
- benny's weren't induced by fraud, duress, or undue influence.
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Term
| a to T, fbo B. Ttee goes to B and asks for permission to do something and B agrees. B then assigns any and all interest to C. Is the asignee bound by the consent of the original benny? |
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Definition
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Term
| When is a successor trustee liable for losses caused by the original trustee? |
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Definition
- original ttee purchased property that he shouldn't have purchased; he is now gone; you continue to retain the property
- successor ttee doesn't take the proper steps to make the original ttee turn over the property
- If the successor doesn't take the proper steps to make the original ttee reimburse the account.
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Term
| What are the exceptions for when a bank won't be responsible for breaches committed by the co-trustees? |
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Definition
- bank participates in the breach
- ttee improperly delegates
- fails to use reasonable care and that enables the co-trustees to breach
- you approve of or attempt to conceal the breach
- you neglect to take the proper steps to make the co-trustee reimburse the trust.
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Term
| 4 big duties applicable to investment of funds |
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Definition
- Duty to use reasonable care and skill
- duty to preserve property
- duty to make property productive
- duty to pay income
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Term
| 3 basic requirements in investing |
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Definition
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Term
| what lead up to the uniform prudent investors act? |
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Definition
- Legal list statute (the old rule - no stocks)
- prudent man rule (primary goal was to conserve principle)
- upia
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Term
| what's the only type of unsecured loan you can make? |
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Definition
| debenture bonds - lending on good faith and credit of the company. US Gov't bonds are the most common and safe. |
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Term
| in a reit that's in a trust, how is title of land held? |
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Definition
| in the name of the bank, not the name of the trust account. |
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Term
| 3 things about mortgage particpation |
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Definition
- old tool, not used much anymore
- commercial bank makes the loan then sells to trust dept.
- don't have proper earmarks.
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Term
| 4 intention rules regarding if there's not authorization directing to sell or retain in document: |
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Definition
- it's easier to find intention that the ttee retain stocks owned by the creator than an intention authorizing him to purchase more
- the fact that the creator specifically names certain securities tends to show an intention that the ttee be authorized to retain
- if the trust came into being during the creator's lifetime it is more likely tha thte creator intended that the ttee could retain
- if you're permitted to invest in certian stocks that tends to imply that the ttee can retain those stocks.
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Term
| With an improper investment, you have to sell within a reasonable time. How do you determine a reasonable time? |
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Definition
- character or property
- risk involved
- what you could receive if you sell now compared to the intrinsic value of the property
- what are the available opportunities for reinvestment?
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Term
| 7 factors the courts look at to determine whether you loaned too much out on a mortgage loan from an account |
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Definition
- character of the land
- is the land improved or unimproved
- is it in urban or rural area?
- how marketable is the land?
- is the value fluctuating?
- what's the trend in real estate values in this area?
- what's the probable income that could've been derived?
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