BPP GDL Study Notes: Chapter 2 Flashcards

1
Q

How does a trust seperate ownership?

A

legal ownership to trustees

beneficial or equitable ownership to beneficiaries

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2
Q

What interests subsist in a trust fund?

A
  1. legal estate in the trustees

2. equitable interest in beneficiaries

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3
Q

What are express private trusts?

A
  • deliberately created by settlor
  • for the benefit of individuals
  • usually used for the protection and preservation of wealth
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4
Q

What are charitable trusts?

A
  • public trusts

- exist to promote a purpose

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5
Q

What are implied trusts?

A
  • trusts that are imposed by the law in certain circumstances
  • can come into being regardless of the intentionsof the settlor
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6
Q

How is a trust ‘express’?

A

if it is deliberately set up by the settlor or implied by his conduct

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7
Q

What is a ‘resulting’ trust?

A
  • the property results or returns to the owner

- might be because the settlor didn’t dispose of it fully or from some other mistake

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8
Q

What is a ‘constructive’ trust?

A
  • trust imposed by law in a number of situations
  • used to remedy a fault or facilitate a transaction
  • eg if A and B enter into a specifically enforceable contract they create a constructive trust
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9
Q

What is a ‘statutory’ trust? Give an example.

A
  • trust implied by statute
  • eg the trusts that are formed on an intestacy which are governed by the Administration of Estates Act 1925, as anmended by the Trusts of Land and Appointment of Trustees Act 1996
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10
Q

What is a ‘bare’ trust?

A

-where the beneficiary (or all the beneficiaries) are sui juris
AND
-the beneficiary (or all the beneficiaries) are absolutely entitled to the trust property

they may call for the trust property to be transfered to them under Saunders v Vaughtier 1841

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11
Q

How is a trust ‘fixed’?

A

if the settlor has determined who the beneficiaries are and how much they will receive (ie the beneficial interests which each beneficiary will take)

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12
Q

What is a ‘vested’ interest?

A

one that is unconditional and therefore exists immediately. Eg to T on trust for A for life remainder B absolutely. A has a vested life interest and B’s interest is “vested in interest”

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13
Q

How else can a vested life interest be referred to?

A

the holder is “vested in possession”

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14
Q

What is a ‘contingent’ interest?

A

an interest that is subject to the fulfilment of a condition which may or may not be met. eg “in remainder to B if he survives A”

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15
Q

What is a discretionary trust?

A
  • eg “to T on trust for such of my descendants as he shall select”
  • one where the trustees have the discretion to decide a)whether to pay the income out b) to whom
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16
Q

What kinds of discretionary trusts are there? What’s the difference?

A

exhaustive:

  • trustees must pay out all income every year
  • can only decide who gets it and in what proportions

or non-exhaustive

  • trustees choose whether to pay out the income or accumulate it each year
  • if they so choose, decide who to pay to and how much
17
Q

What is a ‘protective’ trust?

A
  • initially, the principal benefactor has a life interest
  • if he becomes bankrupt or attempts to dispose of his life interest in whole or in part, the life interest ends automatically
  • life interest is then replaced by discretionary trust of the income for the rest of the beneficary’s life
18
Q

What rights and duties does a trust create?

A
  • ongoing duties for the trustee to look after the property

- proprietary rights in the property and personal rights against the trustee (to enforce the terms) for the beneficiary

19
Q

What is a power of appointment and what else is it called?

A
  • a ‘mere power’
  • it is the authority to deal with someone else’s property
  • gives complete discretion to decide who, within the named class of people, should benefit from the property and how much they get
  • doesn’t have to be used or even considered
20
Q

What is a personal power?

A

a power of appointment given to someone who is not a trustee

21
Q

What is a fiduciary power?

A

a mere power given to a trustee

22
Q

What are the differences between trusts and powers?

A

1) exercise of trust powers is mandatory; no obligation to exercise mere powers
2) courts will enforce a trust but never compel the exercise of a power
3) objects of a fixed trust must be certain, but this isn’t the case at all for powers.
4) all the objects of a trust could collectively demand the trust property, as through Saunders v Vaughtier, unlike the objects of a power