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Trusts > Express Trusts > Flashcards

Express Trusts Flashcards

1
Q

methods of creating an express trust

A

1) self-declaration
2) transfer on trust

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1
Q

self-declaration of trust

A

settlor creates a new equitable interest for beneficiary but legal title remains with settlor

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2
Q

transfer on trust

A

settlor transfers legal title to trustee who holds it for beneficiary

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3
Q

requirements for creation of express trusts

A
  • Certainty of creation
  • certainty of subject matter
  • certainty of objects
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4
Q

constitution of the trust

A

vesting trust property in trustee

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5
Q

certainty of intention

A

certain that settlor intends to create a trust as opposed to a gift

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6
Q

beneficiary principle

A

without beneficiaries the trust cannot be enforceable

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7
Q

intention

A

subjective intention not relevant. sufficient that settlor enters into arrangements that have effect of creating a trust, no necessary for him to realise

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8
Q

certainty of subject matter

A

trust will fail if description is too vague and not possible to ascertain trust property from description

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9
Q

trust for fungible, intangible assets

A

valid (eg. shares)

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10
Q

non-fungible, tangible

A

not valid (eg. diamonds)

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11
Q

fungible, tangible

A

not valid (eg. bottles of wine)

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12
Q

ascertaining beneficial entitlement

A

if trustee is given mechanism to determine beneficial entitlement trust is valid. but if mechanism fails and it’s not possible to ascertain beneficial entitlement the trust will fail

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13
Q

certainty of objects

A

trustees must know exactly who is to benefit and how much they are to receive

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14
Q

which type of trust requires greater degree of certainty of objects

A

greater degree of certainty is required for a fixed trust than a discretionary trust

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15
Q

fixed trusts

A

settlor sets out entitlement of each beneficiary in trust instrument

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16
Q

distribution between class of objects in fixed trusts

A

for this to be valid it must be possible to draw up a complete list of beneficiaries

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17
Q

certainty of objects for fixed trusts

A

trustee must be able to say with certainty whether ‘any given individual is or is not a member of the class’

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18
Q

certainty of objects for discretionary trusts

A

trustees have an obligation to consider the range of possible beneficiaries but dont need to be able to identify all. but trust will fail if class of objects is too wide

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19
Q

Express trust formalities

A
  • must be in writing
  • specific rules for trusts in land
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20
Q

rules for land trusts

A
  • must be signed by settlor
  • can be done by validly executed will
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21
Q

unenforceable

A

trust exists but beneficiary cannot enforce their rights

21
Q

void

A

trust does not come into existence at all

22
Q

constitution of trusts

A

settlor must do everything necessary to be done in order to transfer property & render the settlement binding upon him

22
Q

constitution

A

transfer of legal title from one party to another

22
Q

constitution of self declaration of trust

A

trust is automatically constituted when it is declared (no movement of legal title)

22
Q

constitution for transfer on trust

A

requires legal title in property to be vest (constituted) in trustes

23
Q

testamentary trust

A

created in a will

24
Q

lifetime trust/ inter vivos trust

A

must comply with specific rules relating to type of trust property

24
Q

formalities for choses in action (debt/ bank a/c balance)

A

must be by notice in writing to debtor & legal title transferred once notice is received

24
Q

formalities for trust of shares

A

transferor signs stock transfer form, sends to company and legal title passes when transferee registered in company’s internal register of members

25
Q

formalities for trust of registered land

A

must be by deed and title passed when registered at Land Registry

25
Q

formalities for trust of chattles

A

either by deed of gift or delivery of chattel with evidence of transferor’s intention to transfer

25
Q

formalities for trust of cheques

A

must endorse cheque (sign name on back)

25
Q

when are self-declaration trusts constituted

A

constituted automatically when declared

25
Q

In Re Rose

A

held that transfer of shares was effective in equity once transferor had done “everything in his power” to vest the shares in transferees.

25
Q

what factors will be relevant for unconscionable principle

A

reliance, unfairness and if transferor was acting in bad faith

25
Q

exceptions to Rule in Milroy v Lord

A

1) principle in Re Rose
2) unconscionable principle
3) fortuitous vesting
4) donationes mortis causa

25
Q

failed constitution

A

if trust property is not vested in trustees the trust is incompletely constituted so is void

25
Q

effect of constitution

A

disposition is irrevocable as settlor loses any legal/beneficial interest

25
Q

Rule in Milroy v Lord

A

settlor had intention to create a trust but it was not constituted (failed to complete process or wrong method used) so trust failed

25
Q

Extension of In Re Rose exception

A

extended principle to apply to registered land and it is

26
Q

is it necessary for transferor to send docs to person capable of completing transfer?

A

no, only need to use the correct method and it will be irrevocable if transferor puts matter beyond their own control (sending to transferor’s agent is not outside their control)

26
Q

unconscionable principle

A

court can perfect an imperfect gift whenever it would be unconscionable for the donor to resile from it

26
Q

what does rule in In Re Rose apply to

A

gifts and trusts

26
Q

death of transferor exception

A

fortuitous vesting occurs whereby legal title vests in the recipient in another capacity

27
Q

fortuitous vesting

A

legal title vests in the recipient in another capacity (usually where recipient is also personal rep/ executor of settlor’s will)

27
Q

which case sets out the rule for fortuitous vesting?

A

the rule in Strong v Bird

28
Q

Rule in Strong v Bird

A

by appointing a transferee as executor of will, the transferor must have intended for them to have legal title

29
Q

will Strong v Bird apply even where the recipient is one of several executors

A

yes

30
Q

requirements for Rule in Strong v Bird

A

1) donor must have intention of make an immediate gift
2) gift must relate to existing and property currently owned by transferor
3) must be continuing intention to give (ie cannot change mind)

31
Q
A
32
Q
A

Trusts (2 decks)

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