Also known as: res of the trust · trust res · trust property
Written by attorneys — see sources below.
The property or assets that constitute the subject matter of a trust and that the trustee holds and manages for the beneficiaries.
Ronald Reed created a trust holding investment accounts and real estate for his two adult children. When the trustee sold a parcel and prepared to distribute proceeds, one child demanded a larger share based on past contributions. The trustee divided the proceeds equally after reviewing each beneficiary's interests in the res of trust.
Ravi Reddy and his sister each transferred separate brokerage accounts into a single trust. The trustee tracked the res of trust by allocating gains and losses proportionally to each contributor's original deposit rather than pooling everything without distinction.
Rosalind Reed resigned as trustee of a trust holding commercial leases. Until a successor was appointed, she continued collecting rents and paying insurance on the res of trust to prevent loss of the underlying property.
Roger Ramirez was removed as trustee of a trust containing artwork and securities. He promptly arranged for the successor trustee to take physical possession of the paintings and transferred the brokerage accounts that formed the res of trust.
Ryan Roberts transferred his business interests into a trust but kept broad powers to direct investments and distributions. After his death, creditors argued the arrangement left the res of trust reachable because the retained powers rendered the transfer incomplete.
Ferdinand Straus died on July 1, 1934, leaving a last will and testament dated May 5, 1934, which contained a provision for a trust for his wife for her life of one-third of the decedent’s property both real and personal. On June 28, 1934, three days before his death, he executed trust agreements by which, in form at least, he transferred to trustees all his real and personal property. The beneficiary named in the trust agreement brought this action to compel the trustees to carry out its terms. The widow challenged the validity of the transfer to the trustees. The trial court found that the trust agreements were made, executed and delivered by said Ferdinand Straus for the purpose of evading and circumventing the laws of the State of New York, and particularly sections 18 and 83 of the Decedent Estate Law. The trial court also found that the settlor reserved the enjoyment of the entire income as long as he should live, and a right to revoke the trust at his will, and in general the powers granted to the trustees were in terms made subject to the settlor’s control during his life.
View caseRachel Ramirez funded a trust with investment securities and retained a life income interest. The court examined whether the res of trust remained part of her taxable estate given the degree of control she continued to exercise over the assets.
The executor paid the federal estate tax that included the value of the trust principal and filed suit for a refund in the district court. All facts were stipulated for the district court proceeding. The district court ruled for the government. The executor appealed to the United States Court of Appeals for the First Circuit. The decedent had been a donor to three inter vivos trusts previously established by his wife. He served as a trustee of the trusts until the date of his death. The initial life beneficiary was the decedent's adult son. Eighty percent of the trust income was normally payable to the son, with the balance added to principal. Subsequent beneficiaries were the son's widow and his issue. The trust instruments contained powers in Article 4 and Article 7. Article 4 permitted the trustees in their absolute discretion to increase the percentage of income payable to the son when needed in case of sickness or desirable in view of changed circumstances. The trustees could also cease paying income to the son and add it all to principal during such period as they decided the stoppage was for his best interests. Article 7 gave the trustees broad administrative powers, including discretion to acquire investments not normally held by trustees and authority to determine what was to be charged or credited to income or principal. It further empowered the trustees generally to do all things in relation to the trust fund which the donor could do if living and the trust had not been executed. The government claimed that the powers in the two articles required inclusion of the trust corpus in the decedent's estate. The executor disputed this position after paying the tax and seeking recovery. The district court had ruled against the executor on the stipulated facts, leading directly to the appeal.
View caseThe former trustee must deliver the trust property to a successor or cotrustee and retains duties to protect the assets until delivery occurs. This prevents gaps in management that could harm the property or beneficiaries.
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When the trust is revocable, creditors may reach the trust property because the settlor retains practical control. The analysis focuses on the powers retained rather than the form of title.
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No. The underlying marital character of the assets remains unchanged even after they become the res of trust. Courts treat the property as marital and subject to division regardless of the trust form.
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The trustee must act impartially in investing, managing, and distributing the property while giving due regard to each beneficiary's interests. This duty prevents favoritism that could disadvantage one beneficiary over another.
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…Moreover, other heirs of Senator Bacon intervened and they and the defendants other than the city asked for reversion of the trust property to the Bacon estate in the event that the prayer of the petition were denied. The Georgia court accepted the resignation of the city as trustee and appointed three individuals as new…