Express Private Trust

Question 1

What is a discretionary trust?

Answer 1

Where the trustees are given a duty to exercise their discretion in order to distribute the property in favour of a selected group of persons

Question 2

Under a discretionary trust, do the beneficiaries have a given interest in the property?

Answer 2

No - they have a hope of acquiring one, at the discretion of the trustee

Question 3

What is a power of appointment?

Answer 3

The power to appoint beneficial interests amongst a class of objects.

Question 4

Capacity - what happens when a child is left a settlement?

Answer 4

It is held behind a trust

Question 5

Capacity - mentally incapacitated ability to create a trust is limited by…?

Answer 5

Size of the gift and relationship with the assets owned? re beaney

Question 6

Capacity - how do the court of protection produce a settlement for the mentally incapacitated?

Answer 6

Through s9 of the MHA 1983 - considers what the person themselves would want.

Question 7

What are the 2 key statutory provisions for creating a trust of land?

Answer 7

S53 LPA 1925 - requires proof in writing. 
S2 LP(MP)A 1989 - requires actual written document incorporating all terms.

Question 8

Intro: for a trust to form settlor must make intentions…?

Answer 8

Absolutely clear.

Question 9

Intro: why must the trust be sufficiently clear?

Answer 9

To allow trustee to carry out instructions and for the court to be able to enforce it.

Question 10

Besides statutory formalities the creation of an EPT depends upon what test?

Answer 10

The 3 certainties, as laid down by lord langde in knight v knight. 
Of:
Intention
Subject matter
Objects

Question 11

COI - what did Lord Eldon say in wright v atkyns?

Answer 11

The words must be imperative

Question 12

COI - words make clear trustee is under…?

Answer 12

Binding obligation

Question 13

COI - is the word trust vital?

Answer 13

No - Megarry in re kayford

Question 14

COI - is the word trustee vital?

Answer 14

Not necessarily! Staden v Jones

Question 15

COI which case said only sufficient intention to create a trust is necessary?

Answer 15

Paul v Constance

Question 16

COI - if words show a different intention, I.e. A gift - trust is not valid. Case?

Answer 16

Jones v Lock

Question 17

Predatory words e.g. ‘Hope’ and ‘pray’ in trusts - how has the position changed?

Answer 17

Traditionally accepted - Lambe v Eaves. But, now generally accepted to be too uncertain to create a trust - re Adams. Context is important

Question 18

COI - what case said specific words accepted in the past can act as precedent?

Answer 18

re steele’s will trusts.

Question 19

COI - courts will only accept a trust that is intended to be acted upon - case?

Answer 19

Wyatt - rejects sham trusts that cover an ulterior purpose

Question 20

COI - court will accept evidence of conduct as intention - as per?

Answer 20

Re Farepak Foods

Question 21

CSM - almost anything can form the subject matter of a trust but property settled must be…?

Answer 21

Identified precisely.

Question 22

CSM- Examples of words that failed to create a trust….

Answer 22

Palmers v Simmonds - ‘bulk of my estate’
Re Jones - ‘such parts of my estate as she shall not have sold’
Sprange v Barnard - ‘the remaining part of what is left’.

Question 23

CSM - chattels the same - specific property must be identified to create a trust…

Answer 23

Re goldcorp

Question 24

CSM - different problems arise with shares and financial securities…?

Answer 24

Hunter v moss

Pearson.

Question 25

What is a fixed trust?

Answer 25

Where the beneficiaries have settled and identifiable interests in the property.

Question 26

CSM - absence of certainty can have 2 results….

Answer 26

The gift goes absolutely back to the first donee.

The gift fails and falls back to settlor’s estate - Sprange v Barnard.

Question 27

CSM - how does the court distribute between beneficiaries?

Answer 27

Objective standard - re Golay’s WT

Question 28

COO - FTs - trustee must know the precise identities of the objects as per

Answer 28

List principle as in Re Endacott

Question 29

CSM - if division of properly is left to 1 individual who can no longer exercise discretion….?

Answer 29

The gift fails - Boyce

Question 30

COO - FT - a restrictive approach so if objects named inconclusively the gift fails and returns to settlor under RT - as per

Answer 30

OT computers

Question 31

COO - FT - general rule is description of beneficiaries should be neither

Answer 31

Conceptually or morally uncertain.

Question 32

COO - FT - What have the courts developed to avoid unfairness when the class is uncertain but not all members can be found?

Answer 32

Benjamin test - distribute to know beneficiaries then if missing return - they claim from beneficiaries.

Question 33

COO - DT - traditionally with DTs the same rules as FTs applied - true or false?

Answer 33

True! As per IRC v broadway cottages

Question 34

COO - DT - in what case was the FT test examined and why?

Answer 34

Mcphail v doulton - size of apparent class of beneficiaries, equal distribution impracticable.

Question 35

COO - DTs - what test did the courts change to?

Answer 35

The ‘any given postulant test’ as per Re Gulbenkian - rule on powers

Question 36

COO - DT - in analysing the new test in Re Baden, what did the CA distinguish between?

Answer 36

Conceptual and evidential certainty. 
C - precise definition class settlor wishes to benefit 
E - extent to which evidentially a person can be included in the class - complete certainty virtually impossible.

Question 37

COO - further test if class is so wide it cannot be held up through evidential/conceptual tests.

Answer 37

Administrative unworkability - r v district auditor ex parts West Yorkshire CC

Question 38

COO - test of certainty of objects in a gift subject to a condition presence is the what test?

Answer 38

The Re Allen one. Gift will be valid if it is possible to say of one or more persons that they will undoubtedly qualify even though it may be difficult!

Question 39

COO - Where was the test for certainty of objects applied?

Answer 39

Re Barlow.