1. Creation of Express Trusts Flashcards
What are the formalities to declare an express trust of land?
Manifested and proved
- In writing (evidence of intention and its terms)
- Signed (usually be the settlor, arguably by the trustee)
- OR by will, complying with those formalities
What is the consequence of a declaration of an express trust over land which does not satisfy the formality requirements?
The trust will be valid but unenforceable.
The requirements are evidential only.
If the trust later becomes enforceable (is manifested and proved) it will be dated as starting from the flawed declaration.
Which types of trusts over land must be made according to the formality rules in s.53(1)(b) LPA?
Express trusts only.
Not trusts arising by law (resulting or constructive).
What formalities are there to create an express trust over personal property (not land)?
No formalities.
Can a beneficiary enforce a trust which does not comply with the formalities to create a trust in land?
Renders the trust unenforceable (not void): beneficiary can’t enforce rights until requirements are satisfied & when they are, can enforce rights in respect of period before
Will a trust over land declare without the requisite formalities ever be enforceable?
- Trust remains unenforceable subject to anything rendering it unconscionable for settlor to deny the trust.
What is constitution?
Transfer of legal title
How is constitution achieved for registered land, shares, choses in action, chattels and cheques?
- Registered Land: valid deed, registration
- Shares: sign stock transfer form & send to company; title passes when named entered in register
- Choses in Action: notice in writing to debtor/bank
- Chattels: by deed or gift; deliver with evidence of intention
- Cheques: endorsing cheque by signing on back
What is effect of constitution?
Disposition is irrevocable - settlor ceases to have any legal or beneficial interest in property
When will constitution fail for trust property? And for gifts?
Trust: if not vested in trustees
Gift: if legal title hasn’t passed
Is a trust valid/enforceable if the transferor does not constitute the transfer?
For a gratuitous transfer on trust, if settlor makes no attempt to constitute, the trust will be both unenforceable (for non-compliance) and void (for lack of consitution) subject to unconscionability.
What is the doctrine ‘equity will not assist a volunteer’?
Equity won’t compel a settlor to transfer legal title i.e. won’t perfect an imperfect gift (with unconsionability exception)
OR
treat it as a self-declaration of trust if constitution fails
What are the exceptions to principle of equity won’t assist a volunteer?
- Principle in Re Rose
- Fortuitous Vesting (Strong v Bird)
- Donatio Mortis Causa
What is the principle in Re Rose?
Transfer of shares/land effective in equity once transferor has done everything in their power to effect transfer
a) Correct method of transfer used
b) Transferor done everything w/in their power
c) Documentation in hands of person capable of effecting transfer/transferor has put matter beyond their own control
Sending it to solicitor is not doing everything as solicitor agent of transferor
What is the principle of unconscionability in relation to Re Rose?
Might also apply where unconscionable not to do so - proprietary estoppel
1) Assurance
2) Reliance
3) Detriment
Must be unconscionable to go back on assurance
What is fortuitous vesting?
(Strong v Bird)
The intended recipient of a gift is also the PR of transferor’s estate, so gift is perfected on death
1. Intention to make immediate gift
2. Intention must continue until donor’s death
3. Intended donee becomes executor of donor’s estate
Must relate to existing property, not future
What is a DMC?
Gift made in contemplation of death
Gift:
- made in contemplation of imminent death
- conditional on death
- Delivery of property (not necessarily transfer of legal title, just part with control - can be constructive e.g. keys to a locked box containing deeds)
Note: unlike fortuitous vesting DMC does not require the gift to be immediate, just IF dies.
To make a trust of land, does the declaration and writing have to be contemporaneous?
No, just need evidenced in writing.
If a trust in land is later recognised in writing, can the beneficiary sue in respect of the time between declaration and the written evidence of that declaration?
Yes. The declaration acts retroactively.