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Trust Purposes

Trust Purposes. General Rule – § 112.031. “A trust may be created for any purpose that is not illegal.”. Prohibited Trustee Conduct — § 112.031. Commit a crime Commit a tortious act Commit an act contrary to public policy. Standard. 1. Intent and effect (majority & Texas)

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Trust Purposes

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  1. Trust Purposes

  2. General Rule – § 112.031 “A trust may be created for any purpose that is not illegal.”

  3. Prohibited Trustee Conduct —§ 112.031 • Commit a crime • Commit a tortious act • Commit an act contrary to public policy

  4. Standard • 1. Intent and effect (majority & Texas) • 2. Use of property (minority)

  5. Hunt v. Carroll – p. 49 • If married = nothing • If widow or divorce = $250/month • If remarry current husband = nothing • If live 20 years = entire estate

  6. Stewart – p. 55 • If x named as guardian, trust ends and property goes to others.

  7. Discrimination • Note 1, page 59

  8. Defrauding Creditors • Uniform Fraudulent Transfer Act (Texas version)

  9. Remedy • 1. If defrauding creditors, set aside conveyance to trust up to amount of claim. • 2. If otherwise improper purpose: • Resulting trust (settlor regains property), or • Permit trustee to retain property free of trust. • How decide?

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