Chapter 1: Certainties Flashcards
what are the 3 certainties?
Certainty of intention
Certainty of subject matter
Certain of objects
what is a private trust?
Non- charitable trust
what is an express trust?
intentionally created by the settlor
who can act as a trustee?
settlor
settlor can also appoint others
what is a trustee?
hold the legal title of the trust assets
duty to administer assets fro the benefit of the beneficiaries
what is a beneficiary?
entitled to a benefit from the trust
hold equitable title to the trust assets (beneficial interests)
what are precatory words?
words that express confidence, wish, belief, hope or recommendation.
unlikely to create a trust
what is a gift over in default of appointment?
created a trust which gives a trustee discretion on distribution of the trust property - (alternative gift in case there is a failure to distribute the property).
when will wording usually create a valid trust?
imposes any MANDATORY OBLIGATION.
clear intention by giving instructions to someone to acquire a benefit.
informal example of trust creation
a series of declarations and conversations
what type of settlor’s conduct usually creates a trust?
creating a separate bank account was evidence of intentions to create a valid trust.
what is certainty of subject matter?
Property described (what is in the trust e.g assets)
the beneficial entitlement of beneficiaries (who gets what share).
what is not sufficient for certainty of subject matter?
‘The bulk of my residuary estate’
when will the court apply an objective assessment?
‘reasonable income’ from the property’
when the property is certain but the amount (beneficial entitlement) is not.
when are tangible assets certain?
clearly identified - usually by physical separation.
when are intangible assets certain?
assets are similar/ identical - no need for separation
example - company shares
what is certainty of objects?
certainty of who the beneficiaries are
what is a fixed trust?
each beneficiary is entitled to a specific share of the trust property (what they receive and when).
what is a discretionary trust?
trustees can decide whether or not to pay any member of a defined class of beneficiaries.
Beneficiaries have no automatic right to payment.
Only the right to be considered by trustees.
what is the test to ascertain certainty of objects for a fixed trust?
Ascertainability test: possible to make a complete list of all beneficiaries?
what is the test to ascertain certainty of objects for a discretionary trust?
Individual ascertainability test:
‘Can it be said with certainty that a given individual is or is not a member of the class?’
what is conceptual uncertainty?
Conceptual uncertainty - words used by the settlor to describe beneficiaries are too vague for the court to apply.
Makes a trust void.
when can conceptual uncertainty be avoided?
Gives meaning to identify class e.g ‘Facebook friends’
Settlor left discretion to someone to decide who falls within the class
what is evidential uncertainty?
If trustees are unable to determine exactly who fits the description of the settlor due to lack of evidence.
