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TUSooner
7/19/2010, 02:01 PM
Not as exciting as murder & self-defense & stuff, but whatever.... I don't know anything about trust law. And I mean I know NOTHING.

Here's the dealio:
Siblungs are beneficiarires of a trust. Their shares vest when the trust-creator/parent dies. That is, they each will have full ownership of a share of the parent's money and other stuff at that time.

The question:
While parent lives, can the siblings buy, sell, trade, or encumber (i.e., borrow against, mortgage) their shares, assuming there is no explicit prohibition in the trust instrument?

Examples: Sister A needs money for med school.
*Can she sell her share to Brothers C,D,& E for cash today?
*Can she sell her share to "the trust" for cash to be taken from the account where the trust money is being held in liquid form? (This would be like the Prodigal Son taking his inheritance today, but not in order to waste it on "riotous living.")
*Can she borrow from the trust using her share as security?
*Can she borrow from a third party and use her share as security?
OUMallen
7/19/2010, 02:13 PM
I don't know that, as a practical matter, if that person COULD encumber the trust that any party would allow the beneficiary's share of the corpus to operate at security.

Namely, because the right hasn't yet vested, and there's no guarantee of what will be left of the corpus, if anything, at the time it vests.
OUMallen
7/19/2010, 02:15 PM
(Otherwise, people would create trusts all the time, fund the trust, allow people to take out loans they can't get otherwise using the corpus of the trust as security, then take the corpus back out of the trust, the person takes the loan money, blows it, defaults, and there's nothing there for the entity holding the note.)
OUMallen
7/19/2010, 02:20 PM
But I would think private entities could contract however they wanted. It's just that a beneficiary's as-yet unvested right to a portion of the corpus of a trust, which trust is under no obligation to deliver any of the corpus to the beneficiary, is probably not worth much.
Okla-homey
7/19/2010, 02:59 PM
Methinks OUMallen is all over this. I would add only, the trust document may have language disallowing assignment of rights under the trust.

And if you could assign your rights as a trust beneficiary, wouldn't that defeat one of the main reasons well-healed trustors establish them to benefit their kiddoes in the first place?
TUSooner
7/19/2010, 03:06 PM
Methinks OUMallen is all over this. I would add only, the trust document may have language disallowing assignment of rights under the trust.

And if you could assign your rights as a trust beneficiary, wouldn't that defeat one of the main reasons well-healed trustors establish them to benefit their kiddoes in the first place?

As a practical matter, you guys are correct (as I understand things) but I was wondering more specifically if there are any "spendthrift" type provisions imposed as a matter of OK Law on all trusts.
KABOOKIE
7/19/2010, 04:14 PM
Objection your honor. Witness is speculating.
OUMallen
7/19/2010, 04:18 PM
Objection your honor. Witness is speculating.

Sustained. :confused:
Frozen Sooner
7/19/2010, 04:29 PM
I'm not being paid to research this.
Okla-homey
7/19/2010, 05:16 PM
As a practical matter, you guys are correct (as I understand things) but I was wondering more specifically if there are any "spendthrift" type provisions imposed as a matter of OK Law on all trusts.

Not as a matter of Okie law. But spendthrift provisions can, and are, often included in trusts.

The thing I like about trusts is they are so wonderfully tailorable.

And frankly, a helluva lot simpler to amend or modify than wills because the changes can be incorporated without all the attendant formality of making a will codicil, or entirely new will.

One of my favorite instruments is a will that pours over into a trust. One will for life that pours into trust that can be amended an infinite number of times while you live. sweet.
OUMallen
7/19/2010, 05:23 PM
I'm not being paid to research this.

Me neither. This question is a little too specific to answer well without some research!
Okla-homey
7/19/2010, 05:26 PM
Me neither. This question is a little too specific to answer well without some research!

Research? Pffft. This is basic Okie decedents estates and trust stuff here brotha.

And TU would know this stuff if he weren't one of them wierd-o Looseyanna Napoleonic Code lawyers.;)
OUMallen
7/19/2010, 05:30 PM
Research? Pffft. This is basic Okie decedents estates and trust stuff here brotha.

And TU would know this stuff if he weren't one of them wierd-o Looseyanna Napoleonic Code lawyers.;)

Then I'm glad you have this handled. Someone peem me if anyone needs to drill an oil well. :D
TUSooner
7/19/2010, 06:17 PM
Then I'm glad you have this handled. Someone peem me if anyone needs to drill an oil well. :D

And feel free to call me if you need some help with your habeas corpus petition! ;)
Frozen Sooner
7/19/2010, 06:43 PM
Me neither. This question is a little too specific to answer well without some research!

That was my code for "I'm not looking forward to Dead Law."

Taking it anyhow in the Spring, but not looking forward to it.

Already taking for Fall:

Fed. Jur. (with Judge Pryor from the 11th Circuit, this ought to be entertaining)
Contracts I (funny story behind that, I've already taken Contracts II)
Crim. Pro., post-trial
Law and Economics
Secured Transactions.
Law Review

Spring, tentative:
Bankruptcy
Bus. Orgs
Dead Law
Admiralty
Crim. Pro, pre-trial
Law Review
AlbqSooner
7/19/2010, 07:46 PM
Have fun with secured transactions. Boring stuff that.
bluedogok
7/19/2010, 07:59 PM
I'm not being paid to research this.
....or a grade.
Okla-homey
7/20/2010, 05:10 AM
That was my code for "I'm not looking forward to Dead Law."

Taking it anyhow in the Spring, but not looking forward to it.

Already taking for Fall:

Fed. Jur. (with Judge Pryor from the 11th Circuit, this ought to be entertaining)
Contracts I (funny story behind that, I've already taken Contracts II)
Crim. Pro., post-trial
Law and Economics
Secured Transactions.
Law Review

Spring, tentative:
Bankruptcy
Bus. Orgs
Dead Law
Admiralty
Crim. Pro, pre-trial
Law Review

"Dead law" is miles more interesting than half the crap on your list, IMHO. Particularly "secured transactions." :rolleyes:
Okla-homey
7/20/2010, 05:11 AM
And feel free to call me if you need some help with your habeas corpus petition! ;)

Even if I write it on jailhouse toilet paper with a crayon?
OUMallen
7/20/2010, 08:46 AM
That was my code for "I'm not looking forward to Dead Law."

Taking it anyhow in the Spring, but not looking forward to it.

Already taking for Fall:

Fed. Jur. (with Judge Pryor from the 11th Circuit, this ought to be entertaining)
Contracts I (funny story behind that, I've already taken Contracts II)
Crim. Pro., post-trial
Law and Economics
Secured Transactions.
Law Review

Spring, tentative:
Bankruptcy
Bus. Orgs
Dead Law
Admiralty
Crim. Pro, pre-trial
Law Review

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