Wills Trusts and Estates Flashcards

Under the Michigan Trust Code, a valid private express trust requires all of the following EXCEPT:

Answer: A written instrument signed by two witnesses

Michigan trusts need capacity, intent, ascertainable beneficiaries (or an exception), and trustee duties, but an oral trust of personal property can be valid without witnesses.

A Michigan spendthrift trust generally protects a beneficiary's interest from creditors, but which claimant can still reach it?

Answer: A child or former spouse holding a support order

Under MCL 700.7504, exception creditors such as children or spouses with support judgments may reach a spendthrift trust interest.

Under the Michigan Trust Code, an irrevocable trust may be modified without court approval if:

Answer: The settlor and all beneficiaries consent, even if modification is inconsistent with a material purpose

MCL 700.7602 permits modification or termination by consent of the settlor and all trust beneficiaries regardless of material purpose.

A Michigan trustee invests the entire trust corpus in one speculative stock. Under the Michigan Prudent Investor Rule, the trustee's conduct is judged by:

Answer: The performance and risk profile of the portfolio as a whole and the trustee's conduct at the time of decision, not hindsight

Michigan's prudent investor rule evaluates decisions in context of the whole portfolio and circumstances when made, and generally requires diversification.

In Michigan, a trust created by the settlor's will is known as what, and when does it take effect?

Answer: A testamentary trust, effective at the settlor's death upon probate of the will

A testamentary trust arises under a probated will and takes effect at the testator's death.

Under Michigan law, when a private express trust fails and no alternative disposition is provided, the trust property generally:

Answer: Returns to the settlor or the settlor's estate on a resulting trust

A failed trust ordinarily results back to the settlor or the settlor's successors via a resulting trust.

A Michigan charitable trust to fund a specific hospital fails when the hospital closes. Under cy pres, a court may:

Answer: Apply the trust property to a charitable purpose that reasonably approximates the settlor's charitable intent

Under MCL 700.7413, cy pres lets the court redirect a failed charitable purpose to one approximating the settlor's general charitable intent.