Equity

Question 1

What is equity?

Answer 1

equity operates on the conscienceof the owner of the legal interest

Question 2

What are fiduciary relationships?

Answer 2

relationships of trust and confidence, imposing high standards of behaviour. trustees are fiduciaries

Question 3

Maxims of equity?

Answer 3

Will not assist a volunteer, will not suffer a wrong to be without a remedy, will not allow the law to be used as an engine of fraud

Question 4

What is a trust?

Answer 4

A trust is a relationship recognised by equity which arises where property is vested in someone (trustee), who is obliged to hold it for the benefit of the other person (beneficiary) - Pearce v Stevens

Question 5

What are the parties to a trust?

Answer 5

Settlor, trustee, beneficiary

Question 6

What is a settlor?

Answer 6

Initial owner of the property, legal and beneficial interests of the property combined, transfers the trust property to the trustee

Question 7

What is a trustee?

Answer 7

Holds legal title to the trust property, has powers over the property and owes obligations to the beneficiary, obligations enforced by equity

Question 8

What is a beneficiary?

Answer 8

Has benefit to the property (beneficial or equitable), can enforce the trust against the trustee

Question 9

Why do people use trusts?

Answer 9

To manage assets, to avoid tax, allow future flexibility, prevent frivolent spending

Question 10

What is an express private trust?

Answer 10

created intentionally by the settlor, created to benefit one or more persons, created in settlor’s (i.e. testator’s) will, created during settlor’s life, either by declaring himself trustee, or transferring property on trust to trustee