What is an illusory transfer?

Illusory-Transfer Doctrine refers to a principle by which an inter vivos gift is disregarded by law if the donor retains so much control that there is no good-faith intent to relinquish the transferred property during the conveyor’s lifetime.

What defines a legal trust?

Legal Trusts are sometimes referred to as valid Trusts. At its core, a Trust is a legal entity that holds assets on behalf of the Settlor and is managed by a designated Trustee. The assets can then be distributed to a Beneficiary according to the documents of the Trust.

What is a sham trust?

It is the intention to deceive that is relevant. An allegation that a trust is a sham is an allegation that: the settlor lacked the intention to create a trust in the terms set out in the trust instrument, and. the trustee(s) knew this and joined the settlor in creating trust documents.

What are the four essential elements of a trust?

In this article, the author discusses the four elements of trust: (1) consistency; (2) compassion; (3) communication; and (4) competency. Each of these four factors is necessary in a trusting relationship but insufficient in isolation. The four factors together develop trust.

How do you identify a sham trust?

Accordingly, in order to find a sham, the court must find that both the settlor and the trustee had the intention that the true position should be otherwise than as set out in the trust deed which they both executed..’

How do you avoid a sham trust?

Steps that can be taken to avoid a trust being considered a sham trust are:

  1. have more than 1 trustee or if the trustee is a company, having multiple directors;
  2. not including any terms of trust which allow the assets of the trust to return to the settlor;

What is the most important part of trust?

In a personal relationship, for example, compassion and understanding may be the most important attributes of trust.

What are the three dimensions of trust?

The Three Dimensions of Trust. A long history of research demonstrates that trust can be broken down into three components: competence, honesty, and benevolence.

What is a sham intention?

To summarise, the elements of a sham are: an intention by the settlor that the trust assets are not to be applied as the trust may direct. an intention by the trustee to follow the same purpose or to be reckless as to checking the settlor’s intention.