Pure/Common-Law/Non-Statutory/etc Trusts

[Imalawman]

Hi Wayne,

Welcome to Quatloos.

Can I ask you a favor... Can you start a new thread talking about your experience? I think it's too important for it to be lost in a huge thread such as this one.

Thanks,

Demo

Agreed!

[Judge Roy Bean]

They already did:

viewtopic.php?f=8&t=7348

[LPC]

Someone who claims to have a common law trust is a fool. They no longer exist, except as an archaic concept.

I disagree. The concept of a trust was, and still is, a common law concept, even in those states that have codified some aspects of trust law.

For example, Pennsylvania enacted the Uniform Trust Code in 2006, and the UTC codifies many, but not all, aspects of trust law. For example, the UTC requires that trusts be in writing (no more oral trusts), but it really says nothing about the three essential elements of a trust. And the UTC itself says that the common law of trusts "supplements" the UTC, except to the extent modified by statute.

But not all states have adopted the UTC. New Jersey has not adopted the UTC, and the statutes of NJ have very little to say about trusts except for some provisions regarding the compensation and powers of trustees and how to fill a vacancy in trustees. Almost nothing about how a trust is created or enforced, which is still governed by common law.

Trusts are now regulated by statute in every U.S. jurisdiction;

"Regulated" by statute is different from created by statute. The fact that statutes regulate or modify malpractice actions does not mean that malpractice actions are statutory, because the elements of malpractice are still based on common law tort principles.

A statute might so regulate a pre-existing legal concept as to take it over entirely, essentially pre-empting the common law. Article II of the UCC seems to have done that with respect to contracts for the sale of goods. Whether the UTC has done that with respect to trusts is arguable. But statutory law has certainly not replaced the common law in states such as NJ, which has not enacted the UTC or anything like it.

And the UTC has been enacted in only 24 states. Throw in CA, LA, and NY, which are heavily codified and may have already enacted something similar to the UTC, and you've got only 27 of 50 states, which is barely more than half.

The real problem with the phrase "common law trust" is not that it is incorrect, because it might be correct. The real problem is that the phrase is meaningless, because whether a trust is created according to common law or according to a statute has no practical legal significance.

[JamesVincent]

So, just to interject for a second, it does not matter what premise the trust is created under or for, if it is created in the United States, its territories or federal areas, it falls under a minimum of United States law. And no matter the conditions of the creation it has to fall into line, voluntarily or otherwise, of any applicable laws at the local, state or federal levels. It also must be filed at the appropriate office and reported on by the trustee or any other persons who would benefit from the trust, either at time of creation or when the trust is exercised. Would these be correct?

[LPC]

So, just to interject for a second, it does not matter what premise the trust is created under or for, if it is created in the United States, its territories or federal areas, it falls under a minimum of United States law.

For most values of "falls" and "minimum," I would agree.

And no matter the conditions of the creation it has to fall into line, voluntarily or otherwise, of any applicable laws at the local, state or federal levels.

If you're saying that the creation of a trust doesn't exempt you from non-trust laws, then you're correct. For example, holding land in a trust doesn't suddenly exempt the land from zoning and land use laws that would otherwise apply. And tax laws obviously apply to the extent those laws apply to trusts (as distinguished from individuals, partnerships, or corporations).

It also must be filed at the appropriate office and reported on by the trustee or any other persons who would benefit from the trust, either at time of creation or when the trust is exercised.

Trust laws vary from state to state, but I think it's safe to say that, as a general rule, trust documents do not need to filed with any government agency when the trust is created (or when it is "exercised," whatever that means).

In Pennsylvania, a copy of a trust document would be filed with the state only under the following circumstances:

1. If a trust is created under the will of a decedent, then the trust document is the will itself and the will becomes a public record when it is filed for probate.

2. If the property held in a trust is subject to inheritance tax at the death of the settlor (for example, if the trust were revocable during the settlor's lifetime), then a copy of the trust document would be filed with the inheritance tax return (which is filed with the Register of Wills).

3. If there is litigation among the beneficiaries or between the beneficiaries and trustees, or if the Orphans' Court is for any reason asked to enter an order regarding the trust (such as confirming the names of the persons properly serving as trustees), then a copy of the trust document would be filed with the court, and so become a public record.

The IRS also requires a copy of a trust document if a transfer to the trust requires a federal gift tax return.

But that's about it. There is usually no requirement to register (or advertise) the creation of trust like there is to create a corporation or limited partnership.

With the enactment of the Uniform Trust Code, Pennsylvania now has laws requiring notices to the beneficiaries, and requiring the trustee to provide information about the trust on the request of beneficiaries, but it is up the beneficiaries to enforce the trust, and so the trust will generally remain a private matter unless or until there is a dispute that winds up in court.

[JamesVincent]

Thank you LPC. I was trying to cut through the bulk of the arguments and get right to the meat of the original question again. I think you defined it well enough that there really shouldnt a misunderstanding of what is meant. And by exercise I meant when someone gains from a trust, either monetarily or physically. Like your example of a will as a form of trust, when that will is probated and the persons get whatever their entitled to from the will, they would then have to disclose as income whatever gains they received.

[fmmcosta]

Who can explain the difference between a 14th Amendment citizen and a Article IV Section 2 of the US Constitution citizen?

[jg]

I can, I can !

One is imaginary and the other is real.

One is frivilous (aka without legal merit) and the other is legally proscribed.

One is used nonsensically and the other is fundamental to our system of government.

But, there actually is no difference (other than in some imaginations) as the amendment is simply extending or clarifying the basic consitutional definition or deliniation; so, the same rights and responsibilities apply to a citizen no matter what you call that citizen ( or Citizen or CiTiZeN, etc.).

NOTE: I am not, and never have been, an attorney and have not ever played one on TV.

[LaVidaRoja]

Amendment XIV citizens are born after 1868. Amendment XIV merely EXPANDED the definition of citizenship. For example, Article IV, Section 2 might have said, "All blond males shall be entitled...." Amendment XIV states, "ALL males.." (note, females were not granted true citizenship until Amendment XIX)

[Paul]

The 14th amendment deals with both citizens of the United States and citizens of the individual states, while Article IV, Section 2, deals only with citizens of the individual states?

Not sure how much difference it really makes, because everyone made a citizen of the United States by the 14th Amendment is also made a citizen of the state in which he or she resides, entitling him or her to whatever privileges and immunities Article IV, Section 2, provides to any other citizen of that state. The plain language of the 14th Amendment leaves open the possibility that a citizen of the United States who doesn't reside in any state would not be a citizen of any state, but that's no big deal since the person need only move into a state with the intention of remaining to establish residency. It doesn't prohibit a state from making a non-US citizen a citizen of the state, but Article I, Section 8, moots that by giving Congress the power to adopt uniform naturalization laws.

Or did you actually have a point that you wanted to make, but didn't want to come out and say it because playing "Socratic method" lets you fantasize about being a lawyer?

[Pottapaug1938]

The short answer that there is no meaningful distinction between an Article IV, Section 2 citizen and a 14th Amendment citizen. The amendment effectively wiped out all previous citizenship laws which might be in conflict with it, and said that if you are born in the U.S. and are subject to its jurisdiction (i.e., not the child of a foreign diplomat or of "Indians not taxed"), you are a U.S. citizen, no matter what your race is and how long your ancestors may or may not have been here. Those idiots who rave about being "free born, white, male Premable citizens" (or some similar idiocy) are just blowing legally meaningless smoke at us.

[fmmcosta]

ok, regarding the individual there is no difference.

But corporations are 14th amendment citizens but not Article IV, Section 2 citizens. Is this correct? since they are also persons.

[Imalawman]

ok, regarding the individual there is no difference.

But corporations are 14th amendment citizens but not Article IV, Section 2 citizens. Is this correct? since they are also persons.

You're an idiot.

[fmmcosta]

ok, regarding the individual there is no difference.

But corporations are 14th amendment citizens but not Article IV, Section 2 citizens. Is this correct? since they are also persons.

You're an idiot.

Didn't the Supreme Court, or whatever, ruled that corporations are persons and are protected under the 14th amendment?

That said, you are not "talking" to a member of your family so I will ask you to don't insult me again. Did I insult anyone here? Did I insult you?

[fmmcosta]

Anyway, regarding the citizen thingy I did some research and found the following case law

(...) Upon that ground appeals to this Court to extend the clause beyond the limitation have uniformly been rejected, and even those basic privileges and immunities secured against federal infringement by the first eight amendments have uniformly been held not to be protected from state action by the privileges and immunities clause. (...)

The US Supreme Court in Hague v. CIO, 307 US 496, 520

Indeed, since, by the unvarying decisions of this court, the first ten Amendments of the Federal Constitution are restrictive only of national action, there was nowhere else to look up to the time of the adoption of the 14th Amendment, and the state, at least until then, might give, modify, or withhold the privilege at its will.

The US Supreme Court in Twining v. New Jersey, 211 US 78

Does this mean that 14th Amendment citizens are not protected by the Bill of Rights?

[Pottapaug1938]

Does this mean that 14th Amendment citizens are not protected by the Bill of Rights?

Without addressing the rest of your points, I will say that, legally, there is no such thing as a "14th Amendment citizen". The 14th Amendment overrode all previous definitions of citizenship within the United States; and unless you are not subject to the jurisdiction of the United States, (children of diplomats and children of "Indians not taxed"), you are a citizen of the United States by virtue of the fact that you are born within the United States.

Corporations are not "born"; so they are not citizens. They may be "artificial persons", but they are NOT citizens.

[Pottapaug1938]

Another thing to remember is that there never WAS such a thing as an "Article IV, Section 2" citizen of the United States. That section, in its first clause, merely guarantees citizens of one state all privileges and immunities given to citizens of other states while they are in that state's jurisdiction. For a good look at the way that U.S. citizenship was defined before the 14th Amendment, look at the odious Dred Scott decision -- essentially, you became a citizen of the United States by becoming a citizen of one of its states.

[fmmcosta]

Does this mean that 14th Amendment citizens are not protected by the Bill of Rights?

Without addressing the rest of your points, I will say that, legally, there is no such thing as a "14th Amendment citizen". The 14th Amendment overrode all previous definitions of citizenship within the United States; and unless you are not subject to the jurisdiction of the United States, (children of diplomats and children of "Indians not taxed"), you are a citizen of the United States by virtue of the fact that you are born within the United States.

Corporations are not "born"; so they are not citizens. They may be "artificial persons", but they are NOT citizens.

The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.

it's even on wikipedia

[Pottapaug1938]

Does this mean that 14th Amendment citizens are not protected by the Bill of Rights?

Without addressing the rest of your points, I will say that, legally, there is no such thing as a "14th Amendment citizen". The 14th Amendment overrode all previous definitions of citizenship within the United States; and unless you are not subject to the jurisdiction of the United States, (children of diplomats and children of "Indians not taxed"), you are a citizen of the United States by virtue of the fact that you are born within the United States.

Corporations are not "born"; so they are not citizens. They may be "artificial persons", but they are NOT citizens.[/quote]

The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.

it's even on wikipedia[/quote]

Again, you're missing the point. Your citation speaks of equal protection of the laws, not citizenship, and it talks about persons, not citizenship. A citizen of Germany, for example, could avail herself of the 14th Amendment equal protection provisions, although she is not also a U.S. citizen and is not entitled to U.S. citizenship under the 14th Amendment. Equal protection applies to everyone; and two examples that come to mind are the Nazi saboteurs from 1942, and Col. Abel, the Soviet spy.

Since you are familiar with Wikipedia, you might want to consult its article on corporate personhood, as well.

[The Operative]

Does this mean that 14th Amendment citizens are not protected by the Bill of Rights?

Without addressing the rest of your points, I will say that, legally, there is no such thing as a "14th Amendment citizen". The 14th Amendment overrode all previous definitions of citizenship within the United States; and unless you are not subject to the jurisdiction of the United States, (children of diplomats and children of "Indians not taxed"), you are a citizen of the United States by virtue of the fact that you are born within the United States.

Corporations are not "born"; so they are not citizens. They may be "artificial persons", but they are NOT citizens.

The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.

it's even on wikipedia

Where in your Supreme Court quote does it say that corporations are citizens?
Answer: It does not.

Corporations have been considered "artificial persons" for a long time. In fact, probably before the Constitution was even written. The only thing that has changed over time is the applicability of the rights of natural persons that also apply to corporations and other artificial entities. The 14th amendment did not grant "citizenship" to corporations. However, it did grant citizenship to certain classes of natural persons that were previously excluded from the concept of citizenship under the Constitution. The 14th amendment also ensured that "PERSONS" (IOW both natural and artificial) could not be deprived of property without due process and that "PERSONS" could not be denied equal protection under the laws.