STATUTE OF FRAUDS

1. STATUTE OF FRAUDS

2. Basic Idea • Under certain circumstances, a trust must be evidenced by a writing. • Why? Whom does the writing requirement protect?

3. Basic Requirement -- § 112.004 • 1. Written evidence of the trust’s terms which is • 2. Signed by the settlor (or settlor’s agent).

4. Exceptions • 1. Oral trust if all below are true: • Personal property • Trustee is not the settlor • Trustee is not the beneficiary • Settlor expresses trust intent prior to or simultaneously with transfer

5. Exceptions • 2. Self-declarationif all below are true: • Personal property • Settlor states in writing that settlor holds property in trust, even though the writing does not comply with normal requirements.

6. Exceptions • 3. Part performance • If alleged trustee acts like a trustee, alleged trustee estopped from denying existence of trust.

7. Special rule if trust in writing • All changes and any revocation must also be in writing, even if trust could have been oral originally.

8. Standing to raise Statute of Frauds • 1. Alleged trustee • Thus, trustee can carry out a trust even if Statute of Frauds defense exists (e.g., oral trust of land). • 2. Trustee in bankruptcy

9. Notarization • Not required. • But, prudent practice so trust may be recorded in deed records.