6.3 Special types of Trusts Flashcards
Charitable trusts are not bound by
The beneficiary principle to have a human or legal beneficiary who can enforce the trust
Charitable trusts are not subject to the rules of
Perpetuity (no longer than a lifetime trust) as a charitable trust can last forever
Charitable trusts are
Public purpose trusts benefiting the public interest rather than the interests of an individual or group of beneficiaries
The Cy-Pres doctrine
Where a charitable trust fails, the cy-pres doctrine ensures that the property is still dedicated to similar charitable purposes that is in line with the original intentions of the donor
Ensures that the charity is applied to a purpose as close as possible to the purposes of the original charity
Test for the public benefit test
- is the charity for the benefit of the public or a section
- are the charitable purposes beneficial or detrimental? Does the benefit outweigh any detriment?
Resulting trust
Implied trust
How do resulting trusts arise
- operation of law
- failure by the settlor to transfer the interest to the beneficiary
- trustees have failed to distribute wholly or partly under a discretionary trust and the trust comes to an end
Two types of resulting trusts
1) automatic presumed trust
2) presumed resulting trust
Automatic resulting trust happens when
Property does not have an owner because there has been a failure ie no declaration of trust or an express trust fails / there is a surplus in the property
Resulting trust
Where the transfer fails and the equitable interest goes back to the transferor
Resulting trusts can be rebutted by
Evidence that a gift or loan was intended
Presumption of advancement
- equitable principle
- relationship between the parties ie partners provides evidence that the transfer of property is an outright gift and not subject to a resulting trust if the transfer should fair
Trusts of the family home
Resulting or constructive
Presumption in a family home
Where there is no legal interest, presumption is that they do not have a beneficial interest in the home. But they can rebut that presumption that they do not hold any beneficial interest
To establish a trust in a family home there are two stages
1) acquisition - non legal owner must provide evidence that they have acquired a beneficial interest in the property
2) quantification - the court must determine the extent of the beneficial interest
Contributions that are considered in determining beneficial interest
1) direct financial contributions e.g payments of mortgage or deposit price
2) indirect financial contribution e.g paying utilities
3) non financial contributions ie quitting your job to raise children
Identifying a PMRT
May rebut the presumption of a sole beneficial interest. This is where the non-legal owner contributed to the purchase price of the property
Common intention constructive trust
The presumption that the sole legal owner is the sole beneficial owner can be rebutted through establishing that the parties through words or actions created a common intention constructive trust
Express common intention constructive trust - three elements required to establish
Express agreement
Common to the parties - the intention is shared by both parties
Common intention to share ownership of the home
Additional: non owner must show that they relied on this belief to their determinant
Inferred common intention constructive trust
Where there it is not possible to rely on an express agreement, the court can infer a common intention on the basis of the whole course of conduct of the parties
Joint legal ownership
Presumption is that the beneficial interest is held equally
Joint legal ownership - rebuttal
Joint legal ownership can be rebutted when - 1) the parties had a alternative intention at the time of purchase
2) The parties intention to equally share beneficial ownership varied during the course of legal ownership
Proprietary estoppel requirements
Representation or assurance
Reliance
Detriment due to reliance
Unconscionably on behalf of the legal owner
Third parties in a trust can be held liable when
For a breach of a trust when they have dishonestly assisted
Knowing receipt - when a third party receives property in breach of the trust
Where a proprietary remedy is not available
Because property has gone or trustee has insufficient assets to claim against. Beneficiary can bring a personal remedy against any third parties who knowingly received the trust property in breach of trust or dishonestly assisted the trustee
