Certainties Flashcards
What was the settlor’s intention in Palmer v Simmonds (1975)?
To create a trust for the “bulk of his estate” which was deemed too vague and failed for lack of certainty of objects.
What was the key issue in Re London Wine Company (Shippers) Ltd (1986)?
The lack of specific allocation of wine storage units within the trust, leading to uncertainty about beneficiaries.
How did Hunter v Moss (1993) address the fungibility of shares in a trust?
The court ruled that shares could be treated as fungible assets, allowing the trust to remain valid even without identifying specific shares.
What was the dissenting opinion in Re Lehman Brothers International (Europe) (in administration) (2009)?
Briggs J argued that Hunter v Moss created a beneficial co-ownership share instead of specific shares, potentially impacting future cases
What is the “complete list test” in the context of fixed trusts?
The trustees must be able to identify and prove the existence of all beneficiaries within the class.
What does the “is/is not test” require for discretionary trusts?
The trustees must be able to definitively determine whether someone falls within the defined class of beneficiaries.
What is the risk of a class being too wide in a discretionary trust?
The trust might be deemed administratively unworkable and invalid (McPhail v Doulton).
What is the difference between a fixed trust and a discretionary trust?
Fixed trusts have defined beneficiaries and entitlements, while discretionary trusts give trustees the power to choose beneficiaries within a class and distribute property according to their discretion.
How did Re Baden’s Deed Trusts(No 2) (1973) address the meaning of “relatives”?
Disagreement ensued, with varying definitions adopted by the judges (“descendants from a common ancestor” vs. “next of kin”).
What did Sachs LJ suggest regarding evidential certainty in Re Baden’s Deed Trusts(No 2) (1973)?
The burden of proof lies on the claimant to demonstrate they fall within the beneficiary class.
What is the “complete list test” and why is it relevant for fixed trusts?
Requires identifying and proving all beneficiaries; ensures trust property distribution matches the settlor’s intention.
What is the case that established the “is/is not test” for discretionary trusts?
McPhail v Doulton (1971).
What is the difference between conceptual and evidential certainty?
Conceptual certainty refers to the clarity of the definition of the class, while evidential certainty refers to the ability to prove whether someone falls within that definition
What happens if all three certainties are missing in an inter vivos trust?
No trust formed; likely a resulting trust for the settlor.
What is the consequence of clear intention and transfer in an inter vivos trust, but uncertainty in subject/objects?
Automatic resulting trust arises.
How does uncertainty of intention in a will affect the property?
No trust created; intended beneficiary likely receives a gift.
What happens if there’s a clear trustee in a will but uncertainty in subject/objects?
Trust fails; property falls into the residue of the estate.
What happens if legal title is transferred without a clear trust intention (inter vivos)?
Presumption of resulting trust for the original owner.
What are the three essential elements for a valid express trust?
Certainty of intention, certainty of subject matter, certainty of objects.
What is the difference between fixed and discretionary trusts?
Fixed trusts: Beneficiaries and their interests are defined and cannot be changed by the trustee.
Discretionary trusts: Trustees have discretion to choose among beneficiaries and determine their interests.
What is the principle of “administrative unworkability” and its impact on trusts?
A trust with a class of beneficiaries too broad and impossible to manage effectively could be declared invalid.
What is the basic principle of the rule in Saunders v Vautier?
A sole adult beneficiary with a vested interest in trust property can end the trust early and receive the assets.
What are the two key conditions for a beneficiary to exercise Saunders v Vautier rights?
1) Be over 18 and of sound mind.
2) Have a vested interest in the trust property.
How does the rule extend to multiple beneficiaries with severable interests
Each can individually request their share if they meet the conditions.
What must happen for beneficiaries with non-severable interests to exercise Saunders v Vautier?
All beneficiaries must agree and meet the conditions collectively.
Can beneficiaries with contingent interests use Saunders v Vautier?
Yes, but must act together with all potential beneficiaries, including those under a gift-over.
What is a practical limitation of the rule in large, complex trusts?
Difficulty in getting all beneficiaries to agree and participate.
What do you need to know about a beneficiary’s interest to assess their Saunders v Vautier rights?
Whether it’s immediate (vested in possession) or future (vested in interest only).
When analyzing a fact pattern, how do you distinguish vested from contingent interests?
Look for conditional words like “if” or the presence of a gift-over clause.
