Declaration of Trust, Fixed Interest Trusts and Discretionary Trusts Flashcards
Define administrative unworkability for the purposes of discretionary trusts.
Where the class of people benefitting is sufficiently clear, but the class is so wide as not to form anything like a class.
Primary objection here is where trustees would spend too much time and resources working whom to distribute the trust property to, that there would be no property left to distribute.
Other objection here would be if the class is too large, and therefore practically difficult to determine/ identify who is entitled to the trust property in a rational and sensible way.
Ex[plain the beneficiary principle.
With the exception of charitable purpose trusts, a trust must be for the benefit of individuals.
What is the current perpetuity period for trusts?
The perpetuity period is the idea that trusts should not be able to lock away finances for such a long period of time.
As such the maximum period is currently 125 years.
Can trusts be made orally?
Yes although it is advisable to do so in writing, giving greater chances of enforcement where necessary.
For the declaration of trust over land, how must this be done?
This must be done in wiring, signed by the settlor (in accordance with s53(1)(b) LPA 1925.
Can a declaration of trust over land be satisfied via email?
Yes - an email will constitute in writing for the purposes of s53(1)(b), provided:
1) Name is typed at the end of the email setting out the intention for the trust (which can be their full name, nickname by which they are known; just their first name; just their initials etc);
2) The signature requirement is also satisfied if an automatic email signature applies to their outgoing mail (especially apparent where they put a salutation such as kind regards above this signature block);
3) Note the email address itself is not a signature and is therefore insufficient for the purposes of s53(1)(b).
Which type of trust is subject to the complete list test?
Fixed Interest Trusts
Explain the complete list test.
To satisfy the test it must be possible to draw up a complete list of beneficiaries. To do so the following must be satisfied:
1) Conceptual Certainty - description of the class must be sufficiently clear (ie if language used to describe the class is unclear/ lacks precision, the test will fail);
2) Evidential Certainty - is there sufficient evidence to identify all of the beneficiaries? if not then the trust will fail.
For which type of trust is the administratively unworkable test essential for?
Discretionary trusts.
Explain the significance of the Re Kayford Decision.
An intended customer account need not be opened as long as it was intended to be opened . As such, where there was sufficient intention to open this account, the fact it wasn’t does not mean the intention to create a trust on behalf of customers for their money is not valid.
