Michael A. and Karyn E. Schmitt - Page 13

                                       - 13 -                                         

          Savings for the purpose of deferring the reporting of the                   
          guaranteed tuition as income until the students passed the bar.             
          He contends that he deposited $50,000 of refundable tuition from            
          the guaranteed course offered during 1990 into the World Savings            
          account to be held in trust for the guaranteed students until               
          they took the bar examination.  Petitioner has attempted to                 
          explain his failure to deposit the purported trust property,                
          i.e., the $30,000 in tuition from the winter 1992 guaranteed                
          course, into the alleged trust account.  He contends that because           
          he had previously deposited $50,000 into the World Savings                  
          account and did not withdraw the money to pay refunds to failing            
          students in the previous year, there was sufficient money in the            
          account to cover tuition refunds for the winter 1992 courses.               
          Petitioner argues that it was unnecessary for him to deposit the            
          $30,000 in tuition from the winter 1992 guaranteed course into              
          the alleged trust account.                                                  
               There was some confusion at trial as to which parties,                 
          petitioner or the guaranteed students, were the settlors and                
          beneficiaries of the alleged trust.  Petitioner argues that both            
          he and the guaranteed students are the settlors.  Under                     
          California law, a trust is created only if the settlor manifests            
          an intention to create a trust.  Cal. Prob. Code sec. 15201.                
          Petitioner contends that he intended to create a trust.                     
          Petitioner's intention, as the trustee or a beneficiary (if the             





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  Next

Last modified: May 25, 2011