Which clause governs a fallback distribution within a trust to another taker?

Which clause governs a fallback distribution within a trust to another taker?

• A. GIFT OVER CLAUSE (TRUST)
• B. PRIVATE EXPRESS TRUST
• C. INTER VIVOS TRUST
• D. CHARITABLE TRUST

Answer: (A)

A fallback distribution to another taker is governed by a gift-over clause. This provision names a secondary recipient to receive the trust property if the primary beneficiary cannot take—whether due to death or failure to meet conditions—so the assets have a designated path rather than lapsing. For example, a trust could say, “to A for life, then to B; if B does not survive, to C.” The gift-over clause activates in that contingency, ensuring the intended disposition proceeds to the alternate taker. The other options describe types of trusts rather than a contingency provision. A private express trust and an inter vivos trust refer to the nature and creation of the trust itself, while a charitable trust concerns a charitable purpose. None of these specifically address the mechanism for a fallback distribution to another taker like a gift-over clause does.

A fallback distribution to another taker is governed by a gift-over clause. This provision names a secondary recipient to receive the trust property if the primary beneficiary cannot take—whether due to death or failure to meet conditions—so the assets have a designated path rather than lapsing. For example, a trust could say, “to A for life, then to B; if B does not survive, to C.” The gift-over clause activates in that contingency, ensuring the intended disposition proceeds to the alternate taker.

The other options describe types of trusts rather than a contingency provision. A private express trust and an inter vivos trust refer to the nature and creation of the trust itself, while a charitable trust concerns a charitable purpose. None of these specifically address the mechanism for a fallback distribution to another taker like a gift-over clause does.