STATUTE OF FRAUDS 1 Basic Idea Under certain
STATUTE OF FRAUDS 1
Basic Idea �Under certain circumstances, a trust must be evidenced by a writing. �Why? Whom does the writing requirement protect? A. B. C. D. Alleged settlor. Alleged beneficiary. Alleged trustee. What really goes on in Area 51. 2
Basic Requirement -- § 112. 004 � 1. Written evidence of the trust’s terms which is � 2. Signed by the settlor (or settlor’s agent). 3
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 4
Exceptions � 2. Self-declaration if 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. 5
Exceptions � 3. Part performance If alleged trustee acts like a trustee, alleged trustee estopped from denying existence of trust. 6
Special rule if trust in writing �All changes and any revocation must also be in writing, even if trust could have been oral originally. 7
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 8
Notarization �Not required. �But, it is prudent practice because: A. B. C. D. Trust may then be recorded in deed records. Takes more time and thus increases attorney fees. Provides notaries with enhanced employment. It really isn’t – this is a trick question. 9
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