Express Private Trust Flashcards
What is a discretionary trust?
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
Under a discretionary trust, do the beneficiaries have a given interest in the property?
No - they have a hope of acquiring one, at the discretion of the trustee
What is a power of appointment?
The power to appoint beneficial interests amongst a class of objects.
Capacity - what happens when a child is left a settlement?
It is held behind a trust
Capacity - mentally incapacitated ability to create a trust is limited by…?
Size of the gift and relationship with the assets owned? re beaney
Capacity - how do the court of protection produce a settlement for the mentally incapacitated?
Through s9 of the MHA 1983 - considers what the person themselves would want.
What are the 2 key statutory provisions for creating a trust of land?
S53 LPA 1925 - requires proof in writing. S2 LP(MP)A 1989 - requires actual written document incorporating all terms.
Intro: for a trust to form settlor must make intentions…?
Absolutely clear.
Intro: why must the trust be sufficiently clear?
To allow trustee to carry out instructions and for the court to be able to enforce it.
Besides statutory formalities the creation of an EPT depends upon what test?
The 3 certainties, as laid down by lord langde in knight v knight. Of: Intention Subject matter Objects
COI - what did Lord Eldon say in wright v atkyns?
The words must be imperative
COI - words make clear trustee is under…?
Binding obligation
COI - is the word trust vital?
No - Megarry in re kayford
COI - is the word trustee vital?
Not necessarily! Staden v Jones
COI which case said only sufficient intention to create a trust is necessary?
Paul v Constance
COI - if words show a different intention, I.e. A gift - trust is not valid. Case?
Jones v Lock
Predatory words e.g. ‘Hope’ and ‘pray’ in trusts - how has the position changed?
Traditionally accepted - Lambe v Eaves. But, now generally accepted to be too uncertain to create a trust - re Adams. Context is important
COI - what case said specific words accepted in the past can act as precedent?
re steele’s will trusts.
COI - courts will only accept a trust that is intended to be acted upon - case?
Wyatt - rejects sham trusts that cover an ulterior purpose
COI - court will accept evidence of conduct as intention - as per?
Re Farepak Foods
CSM - almost anything can form the subject matter of a trust but property settled must be…?
Identified precisely.
CSM- Examples of words that failed to create a trust….
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’.
CSM - chattels the same - specific property must be identified to create a trust…
Re goldcorp
CSM - different problems arise with shares and financial securities…?
Hunter v moss
Pearson.
What is a fixed trust?
Where the beneficiaries have settled and identifiable interests in the property.
CSM - absence of certainty can have 2 results….
The gift goes absolutely back to the first donee.
The gift fails and falls back to settlor’s estate - Sprange v Barnard.
CSM - how does the court distribute between beneficiaries?
Objective standard - re Golay’s WT
COO - FTs - trustee must know the precise identities of the objects as per
List principle as in Re Endacott
CSM - if division of properly is left to 1 individual who can no longer exercise discretion….?
The gift fails - Boyce
COO - FT - a restrictive approach so if objects named inconclusively the gift fails and returns to settlor under RT - as per
OT computers
COO - FT - general rule is description of beneficiaries should be neither
Conceptually or morally uncertain.
COO - FT - What have the courts developed to avoid unfairness when the class is uncertain but not all members can be found?
Benjamin test - distribute to know beneficiaries then if missing return - they claim from beneficiaries.
COO - DT - traditionally with DTs the same rules as FTs applied - true or false?
True! As per IRC v broadway cottages
COO - DT - in what case was the FT test examined and why?
Mcphail v doulton - size of apparent class of beneficiaries, equal distribution impracticable.
COO - DTs - what test did the courts change to?
The ‘any given postulant test’ as per Re Gulbenkian - rule on powers
COO - DT - in analysing the new test in Re Baden, what did the CA distinguish between?
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.
COO - further test if class is so wide it cannot be held up through evidential/conceptual tests.
Administrative unworkability - r v district auditor ex parts West Yorkshire CC
COO - test of certainty of objects in a gift subject to a condition presence is the what test?
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!
COO - Where was the test for certainty of objects applied?
Re Barlow.
