Chapter 65

COL12010618GCA BUSINE SS STRUCTURE &FUNCTION CH. 65 TRUST S IN GENERAL 1PART 8 TRUSTS Chapter 65. Trusts in General. Chapter 66. Trusts for the Benefit of Third Persons. CHAPTER 65 TRUSTS IN GENERAL Article 1. Nature & Creation of a Trust. Article 2. Obligations of Trustee. Article 3 . Obligations of Third Persons. ARTICLE 1 NATURE &CREA TION OF A TRUST § 65101. Trusts Classified. § 65102. Voluntary Trust. § 65103. Involuntary Trust. § 65104. Parties to Contract. § 65105. Trustee Defined. § 65106. What Purposes Created. § 65107. Voluntary Trust, how Created as t o Trustor . § 65108. How Created as to Trustee. § 65109. Involuntary Trustee. § 65110. Involuntary Trust from Fraud, Mistake, etc. § 65101. T rusts Classified. A trust is either: 1. Voluntary; or 2. Involuntary . SOURCE: CC § 2215. § 65102. V oluntary Trust. A voluntary trust is an obliga tion arising out of a personal confi dence reposed in, and voluntarily accepted by , one for the benefit of another . SOURCE: CC § 2216. COL12010618GCA BUSINE SS STRUCTURE &FUNCTION CH. 65 TRUST S IN GENERAL 2§ 65103. Involuntary T rust. An involuntary trust is one which is created by ope ration of law . SOURCE: CC § 2217. § 65104.

6. COL12010618GCA BUSINE SS STRUCTURE &FUNCTION CH. 65 TRUST S IN GENERAL 2§ 65103. Involuntary T rust. An involuntary trust is one which is created by ope ration of law . SOURCE: CC § 2217. § 65104. Parties to Contract. The person whose confi dence creates a trust is called the trustor; the person in whom the confidence is reposed is called the trustee; and the person for whose benefit the trust is created is called the beneficiary . SOURCE: CC § 2218. § 65105. T rustee Defined. Every one who voluntarily assumes a relation of personal confi dence with another is deemed a trustee, within the meaning of this Chapter , not only as to the person who reposes such confidence, but also as to all pe rsons of whose affairs he thus acquires informa tion which was given to such person in the like confidence, or over whose affairs he, by such confidence, obtains any control. SOURCE: CC § 2219. § 65106. What Purposes Cre ated. A trust in relation to real and personal property , or either of them, may be created for any purpose or purposes for which a contract may be made. SOURCE: CC § 2220. § 65107. V oluntary T rust, how Created as to T rustor .

eal and personal property , or either of them, may be created for any purpose or purposes for which a contract may be made. SOURCE: CC § 2220. § 65107. V oluntary T rust, how Created as to T rustor . Subject to the provisions o f 21 GCA '13101 [Trusts must be in Writing], a voluntary trust is created, as to the trustor and benefi ciary , by any words or acts of the trustor, indicating with reasonable certainty: 1. An intention on the part of the trustor to create a trust; and, 2.The subject, purpose, and beneficiary of the trust. SOURCE: CC § 2221. § 65108. How Created as to T rustee. Subject to the provisions of 21 GCA '13101, a voluntary trust is created, as to the trustee, by any words or acts of his indicating, with reasona ble certainty:COL12010618GCA BUSINE SS STRUCTURE &FUNCTION CH. 65 TRUST S IN GENERAL 31. His acceptance of the trust, or his acknowledg ment, made upon sufficient con sideration, of its existence; and, 2. The subject, purpose, and beneficiary of the trust. SOURCE: CC § 2222. § 65109. Involuntary T rustee. One who wrong fully detains a thing is an involuntary trustee thereof, for the benefit of the owner. SOURCE: CC § 2223. § 65110.

iciary of the trust. SOURCE: CC § 2222. § 65109. Involuntary T rustee. One who wrong fully detains a thing is an involuntary trustee thereof, for the benefit of the owner. SOURCE: CC § 2223. § 65110. Involuntary T rust from Fraud, Mis take, etc. One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrong ful act is, unless he has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it. SOURCE: CC § 2224. NOTE: No 1970 Civil Code §§ 2225 -2227 existed. ---------- ARTICLE 2 LIABILITIES OF TRUSTEE § 65201. Obligation to Good Faith. § 65202. Not to use for own Profit. § 65203. Certain Transactions Forbidden. § 65204. Trustee's Influence, not to be used for his Ad vantage. § 65205. Adverse Interests not Allowed. § 65206. Same, Disclosed. § 65207. When Guilty of Fraud. § 65208. Presumption Against Trustees. § 65209. Mingling Trust Property Prohibited. § 65210. Liability for Breach. § 65211. Limitation on Liability . § 65212. Co-trustees; Individually L iable. COL12010618GCA BUSINE SS STRUCTURE &FUNCTION CH. 65 TRUST S IN GENERAL 4§ 65201.

hibited. § 65210. Liability for Breach. § 65211. Limitation on Liability . § 65212. Co-trustees; Individually L iable. COL12010618GCA BUSINE SS STRUCTURE &FUNCTION CH. 65 TRUST S IN GENERAL 4§ 65201. Obligation to Good Faith. In all matters connected with his trust, a trustee is bound to act in the highest good faith toward his beneficiary , and may not obtain any advan tage therein over the latter by the slightest misrepresentation, c oncealment, threat, or ad verse pressure of any kind. SOURCE: CC § 2228. § 65202. Not to use for own Profit. A trustee may not use or deal with the trust property for his own profit, or for any other purpose uncon nected with the trust, in any manner . SOURCE: CC § 2229. § 65203. Certain T ransactions Forbidden. Neither a trustee nor any of his agents may take part in any transac tion concerning the trust in which he or any one for whom he acts as agent has an interest, present or contingent, adverse to t hat of his beneficiary , except as follows: 1. When the beneficiary , having capacity to con tract, with a full knowledge of the motives of the trust ee, and of all other facts concerning the transac tion which might affect his own decision, and

When the beneficiary , having capacity to con tract, with a full knowledge of the motives of the trust ee, and of all other facts concerning the transac tion which might affect his own decision, and without the use of any influence on the part of the trustee, permits him to do so; 2. When the beneficiary not having capacity to con tract, the proper court, upon the like information of the facts, grants the like per - mission; or, 3. When some of the beneficiaries having capaci ty to contract, and some not having it, the former grant permission for themselves, and the proper court for the latter, in the manner above pre scribed. SOURCE: CC § 2230. § 65204. T rustee's Influence, not to be Used for His Advantage. Atrustee may not use the influence which his position gives him to obtain any advantage from his beneficiary . SOURCE: CC § 2231. COL12010618GCA BUSINE SS STRUCTURE &FUNCTION CH. 65 TRUST S IN GENERAL 5§ 65205. Adverse Interests not Allowed. No trustee, so long as he remains in the trust, may under take another trust adverse in it's nature to the interest of his beneficiary in the subject of the trust, without the consent of the latter . SOURCE: CC § 2232. § 65206.

mains in the trust, may under take another trust adverse in it's nature to the interest of his beneficiary in the subject of the trust, without the consent of the latter . SOURCE: CC § 2232. § 65206. Same, Disclosed. If a trustee ac quires any interest, or becomes charged with any duty , adverse to the interes t of his benefi ciary in the subject of the trust, he must imme diately inform the latter thereof, and may be at once removed. SOURCE: CC § 2233. § 65207. When Guilty of Fraud. Every violation of the provisions of the preceding sections of this Article is a fraud against the beneficiary of a trust. SOURCE: CC § 2234. § 65208. Presumption Against T rustees. All transactions between a trustee and his benefi ciary during the existence of the trust, or while the influence acquired by the trustee remains, by which he obtains any advan tage from his beneficiary , are presumed to be entered into by the latter without sufficient consideration, and under undue influ ence. SOURCE: CC § 2235. § 65209. Mingling T rust Property Prohibited. A trustee who willfully an d unnecessarily mingles the trust property with his own, so as to consti tute himself in appearance its absolute owner , is

5. § 65209. Mingling T rust Property Prohibited. A trustee who willfully an d unnecessarily mingles the trust property with his own, so as to consti tute himself in appearance its absolute owner , is liable for its safety in all events, and for the value of its use. SOURCE: CC § 2236. § 65210. Liability for Breach. A trustee who uses or disposes of the trust property , contrary to § 65202 of this Chapter , may , at the option of the beneficiary , be required to account for all profits so made, or to pay the value of its use, and, if he has disposed thereof, to replace it, with its fru its, or to account for its proceeds, with interest. COL12010618GCA BUSINE SS STRUCTURE &FUNCTION CH. 65 TRUST S IN GENERAL 6SOURCE: CC § 2237. § 65211. Limitation on Liability. A trustee who uses or disposes of the trust property in any manner not autho rized by the trust, but in good faith, and with intent to serve the interests of the beneficiary , is liable only to make good whatever is lost to the beneficiary by his error . SOURCE: CC § 2238. § 65212. Co -trustees; Individually Liable. A trustee is responsible for wrongful acts of a co -trustee to which he consented, or w hich, by his negli

he beneficiary by his error . SOURCE: CC § 2238. § 65212. Co -trustees; Individually Liable. A trustee is responsible for wrongful acts of a co -trustee to which he consented, or w hich, by his negli gence, he enabled the latter to commit, but for no others. SOURCE: CC § 2239. NOTE: No 1970 Civil Code §§ 2240 -2242 existed. ---------- ARTICLE 3 LIABILITIES OF THIRD PERSONS § 65301. Involuntary Trustees. § 65302. Third Persons, Trust Property . § 65301. Involuntary T rustees. Every one to whom property is transferred in violation of a trust, holds the same as an involuntary trustee under such trust, unless he purchased it in good faith, and for a valuable consider ation. SOURCE: CC § 2243. § 65302. Third persons, T rust Property. One who actually and in good faith transfers any money or other property to a trustee, as such, is not bound to see to the application thereof, and his rights can in no way be prejudiced by a misapplicat ion thereof by the trustee. Other persons must, at their peril, see to the proper application of money or other property paid or delivered by them. COL12010618GCA BUSINE SS STRUCTURE &FUNCTION CH. 65 TRUST S IN GENERAL 7SOURCE: CC § 2244.

ns must, at their peril, see to the proper application of money or other property paid or delivered by them. COL12010618GCA BUSINE SS STRUCTURE &FUNCTION CH. 65 TRUST S IN GENERAL 7SOURCE: CC § 2244. NOTE: No 1970 Civil Code §§ 2245 -2249 existed. ----------COL12010618GCA BUSINE SS STRUCTURE &FUNCTION CH. 65 TRUST S IN GENERAL