C11 - Trust Creation Flashcards
Classification of trusts
Express
Created intentionally in lifetime or existence upon death
Classification of trusts
Constructive
Operation of law, order of court
Classification of trusts
Resulting
When intended trust fails
Classification of trusts
Implied
From circumstances
Not intended
Sham trust
Settlor acts as if he wants to set up trust
Interfere with daily running
Valid trust
Three certainties
Object
Must have ascertainable beneficiaries
Valid trust
Three certainties
Intent
Intended to create trust
Valid trust
Three certainties
Subject
Identifiable trust property
Valid trust
Must also have
Settlor have legal capacity
Owned assets
Completely constituted. (Properly legal ownership of assets)
Users of trust
Wealthy individuals, entrepreneurs
Advantage of trust
Tax avoidance Preserving confidentiality Assets in safe jurisdictions Estate planning Asset protection
Disadvantage of trust
Costly Separation of legal Ownership not recognised September can't do exactly what they want to do with it Not got same attitude to risk as trustee
Trust instrument
Trust deed
Interpretation clause
Definitions
Trust instrument
Trust deed
Proper law clause
Law governing
Trust instrument
Trust deed
Disapprove provisions
Terms trustees hold property and distribute to beneficiaries
Trust instrument
Trust deed
Admin provision
Trustee appointment/removal
Trust instrument
Trust deed
Schedule
Powers, of protector, initial settled funds, benefits and excluded persons
Trust instrument
Trust deed
Signature
And witness
Essential features of a trust
Protector - ensure beneficiaries are looked after
Settlor - place 1st asset in trust
Trustee - control/legal ownership
Beneficiaries- person/entity receive benefit
Trust - pooled assets. No legal personality
Perpetuity period
Calculated by preference to someone in existence at time trust created
Cy-pres doctrine
If charitable first finds itself without beneficiaries, court make order that trust property applied for similar charitable purpose
Void
Outcome as if transaction hasn’t happened
Voidable
Valid until avoided
