Chapter 2

Question 1

What does a trust deed do?

Answer 1

• specifies the trust property, names the trustees and beneficiaries
• sets out the powers of the trustees, rights of beneficiaries.
For deed of assignment- must be signed, witnessed by settlor and trustees and independently witnessed.
They can also be created over life policies from outset via life office the trust will be set Putin the same document

Question 2

Creation of a trust via a will

Answer 2

• can be expressly created or via gift to minor
• executors are effectively trustees for will admin purposes
• if beneficiaries are units executors must hold assets under trust until 18 or pay away to parent or guardian of minor
• a will can set up specific trust such a life int ( immediate post death interest which will not end until the wife dies and all kids are 18)
• will trust only gets set up on death, assets only move into the trust after admin of estate is finished
• will trust. An be revoked before death, rewrite a new one or destroy
• statutory trust for minors - on death with no will

Question 3

How to revoke a will

Answer 3

Destroy or execute a new one that revokes all previous wills

Question 4

How can trusts be created

Answer 4

By; 
Deed
Will
Statute
Court order
In secret
Personal property orally 
Implied from the conduct of the parties- not written

Question 5

Creation by statute, most important provisions;-

Answer 5

1) Administration of estates act 1925
This provide for the creation of a trust for sale over and instates estate it was altered by the trust of land and appointment of trustees act 1996 so that land with in the estate is now held on a trust of land where personal representatives have a power but not a duty to sell
2) law of property act 1925. Where land is conveyed to persons in undivided shares as tenants in common it will vest in the first four named individuals in the conveyance
3) law of property act 1925 where a legal estate is held by two or more persons as joint tenants it is held on trust.
4) trust of land and appointment of trustees act 1996.where there is a purported conveyance of a legal estate to a minor the conveyance operates as a declaration that the land is held in trust for the minor until they come with age.
5) married women’s property act 1882 this enables a person to create a trust of a life policy in circumstances where apart from that no trust would be created.

Question 6

What is a constructive trust?

Answer 6

One that is imposed by law and is therefore created by a court order it has not arisen because of the expressed intent of a settlor but has been created by the court.
Examples would be arising from divorce proceedings or weather has been a breach of trust

Question 7

What is a secret trust?

Answer 7

They are an exception to the provisions of the wills act 1837 where writing signing all witnesses needed
• the main objective is to preserve the identity of the person on whom the tester wishes to confirm a benefit.
•fully secret trust - where no trust appears on the face of of the will.
• half secret trust- where a named beneficiary appears on the face of the world but the objectives of the trust are not revealed.

Question 8

What conditions must be satisfied for a fully secret trust?

Answer 8

1) The tester must communicate that the property is to be fully secret trust under there will
2) it must be communicated at any time during the test is life time and it is irrelevant whether the details are made known to the beneficiary before or after the date of the will
3) all the terms of the trust must be clearly communicated but communication can be in the form of a sealed letter and,
4) The tester must communicate a legal binding obligation on the Legatee and the legatee must accept the fully secret trust.

Question 9

What is a half secret trust?

Answer 9

It appears in the same terms of the will but the purpose is not stated.
The testator must communicate the half secret trust before or at the same time as making a will.

Question 10

What is an unwritten trust?

Answer 10

It’s one that has not been expressly created but it is implied from the actions or intentions of the parties involved.
And example would be a business partner purchases the property on behalf of the others but no written document setting this out.

Question 11

What are the three certainties of creating a trust?

Answer 11

Words- must show that a trust is intended no special form of words is necessary using the words “on trust for” would be acceptable

Subject matter- The property which is to form the trust must be specified.

Objects- this is the beneficiaries and must be certain simply by naming the beneficiaries. It can also be a class of beneficiaries.

Question 12

What is the law of perpetuities regarding trusts?

Answer 12

It is against public policy for prop property to be settled on trusts in definitely.

At the end of a perpetuity period the trustees powers must cease and the trust must come to an end.

The rule does not apply to certain charitable trusts almost pension schemes

Question 13

What are the main aspects of the perpetuities and accumulations act 2009?

Answer 13

Introduction of a single 125 year perpetuity period regardless of trust deed

There will be no restriction on accumulating so that trustees will be able to accumulate for 125 years or the whole of the trust period.

The accumulation period for all charities became 21 years instead of an indefinite period.

I shorter trust period may still be chosen and incorporated into the trust deed.

It gives trustees of existing trust the power to adopt by deed of perpetuity period of 100 years if based on specific life- this is irrevocable.

In general the 2009 that has no effect on trust and wheels created before six of April 2010, which continue to be governed by the 1964 act regime.

Question 14

The perpetuities and accumulations act 1964 to 2009 details of the act?

What 2 periods of perpetuity can you choose from?

Answer 14

•A lifetime of a specified person alive when the trust was created plus21 years or;
•a fixed period of eight years from the date the trust was created.
It might not have been possible to vest in the first period it would be assumed to be valid unless it is definitely know that the period has been exceeded under the wait-and-see test.

A trust may provide that an interest vest’s only if a beneficiary reaches a certain age. If this is over 21 this might cause the rule against perpetuities to be broken. The 1964 act provides that a younger age down to 21 can be substituted if doing so would make the trust valid

Question 15

What is the perpetuities and accumulations act 2009 and 1964?

Answer 15

1 Common law governing the period of time trusts can run for
2 It is against public policy for property to be settled on trust for an indefinite period
3 Trustees powers cease and the trust must come to an end at the end of the perpetuity period

Question 16

What do you types of trusts are excluded from the perpetuities and accumulations act?

Answer 16

Certain charitable trusts

Most pension schemes

Question 17

What date did the perpetuities and accumulations act 2009 and force?

Answer 17

Sixth of April 2010 and applies to all lifetime trusts created and wills executed on or after that date
Wheels dated prior to this date fall under the 1964 act even if death is after 6 April 2010

Question 18

In most settlements the trust period is the same as?

Answer 18

It’s the same as the perpetuity period.

Trustees must exercise their powers during that trust period.

Question 19

What are the four period specified in the 1925 perpetuity and accumulations act?

Answer 19

.1 life of the settlor

.2years from death of the testator or settlor

.3 the duration of the minority, aged under 18 and unmarried or persons living at the death of settlor or testator

.4 the duration of the minority of any persons entitled under the settlement.

To further periods were added that only fortress coming into force after 15 July 1964

.1 the period of 21 years from the date of making the disposition

.2 the duration of the minority of any person in being at that date.

Question 20

In general what is the perpetuity period for non-charitable trust since 5 April 2010?

Answer 20

125 years

Question 21

When does I will trust start?

Answer 21

On the testator’s death