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Express Trusts Flashcards

1
Q

What are the elements of an express trust?

A

1) The three certainties; 2) formalities; and a 3) constitution.

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2
Q

What are the three certainties?

A

1) Intention; 2) subject matter; and 3) object.

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3
Q

What is intention for the purposes of the three certainties?

A

Did the settlor have the intention to create the trust?

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4
Q

What are the objects possible for express trusts?

A

1) Beneficiaries; 2) charitable purpose; and 3) private purpose.

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5
Q

Which case illustrates the general rule of the three certainties?

A

(Knight v Knight).

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6
Q

What are precatory words?

A

Words of wishing, hoping, and praying.

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7
Q

Do precatory words establish certainty of intention when used alone? Which case illustrates this?

A

No they do not establish certainty of intention when used alone (Lamb v Eamed).

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8
Q

Does one have to know that they are making a trust in order for intention to be satisfied for express trusts? Which case illustrates this?

A

No the criteria for a trust just have to be met (Paul v Constance).

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9
Q

What does the certainty of subject matter mean? Which case illustrates its principle?

A

A trust cannot be created without property to which it can attach (Lehman Brothers v CRC Credit Fund Ltd).

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10
Q

What is the problem of adjectives for the purposes of certainty of objects? Which case illustrates this?

A

Certain adjectives like ‘best’ in ‘my best painting’ makes trust uncertain hence void (Re Golay’s).

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11
Q

Is there certainty of objects in saying ‘50 out of 250 shares’? Why? Which case illustrates this?

A

Yes sufficient certainty because all shares are the same (Hunter v Moss).

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12
Q

What is the beneficiary principle? Which case illustrates it?

A

Every trust needs a beneficiary (Morice v Bishop of Durham).

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13
Q

What is fixed in a fixed trust?

A

It is the extent of each beneficial interest which is fixed.

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14
Q

What if the fixed trust doesn’t give share numbers for more than one beneficiary? What is the rule then? What does this rule mean?

A

Equity is equality is the rule. Which means that assets get divided evenly between beneficiaries.

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15
Q

Do we need to know how many beneficiaries there are for a fixed trust? What’s the test called for this? What does the test say?

A

Yes we do and the test is called the ‘complete list’ test which checks that there is a complete list of beneficiaries.

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16
Q

In a fixed trust, what are the options if some or one of the beneficiaries are missing? Which cases illustrate these?

A

1) Court authorises trustees to treat beneficiary as if dead, and if he returns he can recover his shares (Re Benjamin); 2) trustees could get insurance for missing beneficiaries (Re Evans).

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17
Q

What is discretionary in a discretionary trust?

A

The discretion is as to the beneficial interests.

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18
Q

For a discretionary trust for a certain class, what test is applied to see whether certainty of object exists for that trust? What’s the test? Which case illustrates this?

A

The ‘is or is not test’. Which determines certainty based on whether it can with certainty be said whether any given individual is or is not part of the class mentioned (McPhail v Doulton).

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19
Q

For the purposes of trusts, What is administrative unworkability? Which case illustrates this?

A

A class too wide to the point that it’s too much for the trustee to carry out.

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20
Q

Could you refer someone else to cure uncertainty of object? Which case illustrates this?

A

No (Re Wynn).

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21
Q

This case shows that every trust must have a definite object. What’s the exception to this rule?

A

(Morice v Bishop of Durham). Charitable purpose trusts are the exception to the rule.

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22
Q

Which case and statute illustrate and codify that charitable purpose trusts just need to be exclusively charitable to fulfill the certainty of objects?

A

(Chichester Diocesan Fund and Board of Finance v Simpson) and (S1, Charities Act 2011).

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23
Q

What is the time limit for charitable trusts? Is this number similar to other trusts?

A

They may be perpetual and no other trusts have a time limit.

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24
Q

What did the (Charities Act 2006) do to the previous law?

A

Majorly reformed and consolidated old law.

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25
What did the (Charities Act 2011) do to the previous law?
Tided up (more user friendly) and further consolidation.
26
What is a charity? What statute and section addresses this?
A trust for charitable purposes only (s1(1) CA 2011).
27
What is a charitable purpose? What statute/section address this?
Anything that falls within section (s3(1) CA 2011) and is for the public benefit as addressed in (s4 CA 2011). (s2(1)) addresses this.
28
What statute/section contains the list of charitable purposes? Which contains the clarifications?
(s3(1)) contains list of purposes while (s3(2)) clarifies those listed in (s3(1)).
29
What are the charitable purposes?
1) the prevention or relief of poverty; 2) the advancement of education; 3) the advancement of religion; 4) the advancement of health or the saving of lives; 5) the advancement of citizenship or community development; 6) the advancement of the arts, culture, heritage or science; 7) the advancement of amateur sport; 8) the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity; 9) the advancement of environmental protection or improvement; 10) the relief of those in need because of youth, age, ill-health, disability, financial hardship or other disadvantage; 11) the advancement of animal welfare; 12) the promotion of the efficiency of the armed forces of the Crown or of the efficiency of the police, fire and rescue services or ambulance services; 13) any other purposes— (i) that are not within paragraphs (a) to (l) but are recognised as charitable purposes by virtue of section 5 (recreational and similar trusts, etc.) or under the old law, (ii) that may reasonably be regarded as analogous to, or within the spirit of, any purposes falling within any of paragraphs (a) to (l) or sub-paragraph (i), or (iii) that may reasonably be regarded as analogous to, or within the spirit of, any purposes which have been recognised, under the law relating to charities in England and Wales, as falling within sub-paragraph (ii) or this sub-paragraph.
30
What is the structure (in order) for approaching a problem question in the exam?
s1 - is the trust exclusively charitable? ---> s2 - what is a charitable purpose? ---> s3 - is it a purpose from the (s3(1)) list? ---> s3 - any clarifications from (s3(2))? ---> case law - any old authorities? ---> case law - post act authorities? ---> s4 - is it for the public interest?
31
What is poverty for the purposes of CA 2011? Which case illustrates this?
Poverty does not mean destitution. It means going short in a broad sense (negative definition) (Re Coulhurst).
32
For the purposes of CA 2011; what does 'advancement' mean in advancement of education? Which case illustrates this? What are the facts of the case briefly?
Advancement means the creation and spread of useful knowledge (Re Hopkins - investigation of whether Shakespeare wrote his plays and results are to be spread).
33
Is spreading the information for the purposes of advancement of education essential? What are the exceptions if any? Which case illustrates this? State the facts briefly.
Yes it is essential without any exceptions (Re Shaw - man wanted to research alphabet to see if he can add to it but without spreading).
34
Is there a qualitative test for charities for the purposes of advancement of education? Which case illustrates this? Give facts briefly.
Yes (Re Pinion - man wanted to spread/display rubbish and bad art).
35
For advancement of religion, what criteria causes something to qualify as 'religion'?
1) belief in a god, goddess, supreme being, divine, transcedental being or entity or spiritual principle; 2) worship or reverence; 3) a degree of cogency, cohesion, seriousness, and importance; 4) positive, beneficial, moral or ethical framework.
36
What section is public benefit under?
Section 4.
37
What are the criteria for the assumption of public benefit for any purpose? Which statute/ section codifies this? Which case illustrates this?
You cannot assume public benefit for any one purpose (s4(2)) (Independent Schools Council Case).
38
Who should be benefiting from the charity for it to be considered for the public benefit? Which case illustrates this?
'sufficient section of the public' (Independent Schools Council Case).
39
For a charity to have public benefit, what is considered a 'benefit'? Which case illustrates this?
This is case specific: i.e. nuns praying for community is not considered as a benefit per the law (Gilmour v Coats).
40
What is the 'personal nexus rule'? Which case illustrates it?
Those who may benefit must not be linked by connection such as family, common employer, etc. (Oppenheim).
41
What is the exception to the 'personal nexus rule'? Which case illustrates this?
Trusts for the relief or prevention of poverty (Dingle v Turner).
42
Can political purposes be charitable? What are considered political purposes?
No. Party politics, and changing the law are considered political purposes.
43
This case illustrates a rule that allows beneficiaries to compel the trust assets when they are of full capacity. What is it? What is the rule?
(Sauders v Vautier) - where you are of full age and capacity and are absolutely entitled (either individually or as a group of beneficiaries), you can compel the trust to be wound up in your favour.
44
Can a trust be a non-purpose trust if it can be said that someone is benefiting but is worded as if it is a purpose trust? Which case illustrates this? Briefly mention facts.
Yes; as long as there is someone benefiting purpose-like wording is considered sufficient for certainty (Re Osoba - 'maintenance and education of daughter' not a purpose trust) (Re Denley).
45
Name all the private purpose trusts that are applicable for this course and the cases that illustrate them.
1) Trusts for head stones (Re Hooper); 2) horses and dogs maintenance as long as they live (Re Dean); 3) Fox hunting trusts (Re Thompson);; 4) Saying masses in private (Bourne v Keane).
46
What is the perpetuity of a non-purpose trust? Which statute declared this?
125 years (and no other period) (Perpetuities and Accumulations Act 2009 (s5)).
47
What does a modern discretionary trust look like in terms of what powers it gives to trustees?
Trustees are given wide power.
48
What kind of powers do the trustees usually have under a modern discretionary trust?
1) They can accept new assets added to trust; 2) transfer assets to new settlements; 3) add or remove objects; 4) distribute income and capital among objects ; 5) give remainder to charity???
49
What are letters of wishes?
Letter or memorandum with confidential information provided to trustee by the settlor or beneficiaries.
50
What does a letter of wishes usually contain?
Facts and wishes.
51
Is a letter of wishes legally binding?
No it is not, it is discretionary for the trustee to follow or not.
52
Is there a right for the beneficiaries to see letter of wishes?
No there is not a right to see it.
53
What rights arise to the beneficiaries if they see a letter of wishes?
They can scrutinise it.
54
What rights arise to the beneficiaries if they see a letter of wishes? Which case illustrates this?
They can scrutinise it (Breakspear v Ackland).
55
What is a protector and what is their role?
A person appointed by trust to direct the trustees or refuse consent to the trustees in their discretion.
56
Why do people appoint trustees?
They act as a check for the trustees.
57
What powers do protectors have?
???
58
What are formalities? Give examples briefly.
Particular form may be required for something to happen i.e. signature, deed, etc.
59
When are formalities required?
1) Testamentary dispositions; 2) interests in land; 3) assignments; 4) other things.
60
What is the difference between testamentary and inter vivos?
Testamentary is after death, inter vivos is during life.
61
What act governs wills?
The (Wills Act 1837).
62
What is the scope of the word 'will' according to the (Wills Act 1837). Which section in the act states this?
The word 'will' extends to any other testamentary disposition (s1).
63
What is needed for a will to be valid? What act/section dictates this?
1) It is in writing, and signed by testator, and 2) with two or more witnesses present at the same time (Wills Act 1837 (s9)).
64
For land disposition, what formality is required for a contract of sale? What section dictates this?
The disposition has to be made in writing (Law of Property (Miscellaneous Provisions) Act 1989).
65
What are the criteria for transfer of legal title? Which act/section dictates these?
1) Deed (Law of Property Act 1925, s52); 2) registration (Land Registration Act 2002, s27).
66
Is writing necessary for the declaration of a trust? Is it necessary for anything?
No it is not necessary for declaration but it is necessary in order to prove the trust exists.
67
Do testamentary trusts always have to be in writing? Any exception?
Mostly but there is an exception: secret trusts.
68
Can an oral trust of land be proved? Any exceptions? Which case illustrates this?
No it cannot with the exception of fraud (Soar v Ashwell).????
69
What is constitution for the purposes of trusts?
It is transferring the trust assets to the trustee.
70
Does constitution require formalities? If yes, what for?
It is required for land, company shares, and equitable interests.
71
When is constitution an issue?
In inter vivos trusts when settlor is not a trustee.
72
When is constitution not an issue? Why?
When settlor is trustee because he already has ownership, and for testamentary trusts because executors get property by operation of law.
73
What temptations arise regarding incomplete gifts and unconstituted trusts?
The temptation to save them.
74
Is it possible to save incomplete gifts and unconstituted trusts as a self declared trust? Why or why not? Which case illustrates this?
No because intention to transfer does not equal intention to be trustee (Richards v Delbridge).
75
What case illustrates that constitution is not a problem for settlors who are trustees?
(T Choithram Int SA v Pagarani).
76
Can constitution be established if trustee gets assets fortuitously? Which case illustrates this?
Yes (Re Ralli's Will Trusts).
77
What are the main duties of express trustees?
1) Obey; 2) account; 3) care; and 4) loyalty.
78
What is the difference between disobedience of a trust and poor performance?
Disobedience is doing something that is not authorised, or failing to do something required, by the trust. Poor performance is doing authorised activities but below the standard of a reasonable trustee.
79
What kind of liability is enforced on disobedience? Which case illustrates this?
Strict liability (Eaves v Hickson).
80
Where can the terms of the trust be found?
Most can be found in the provision of the trust instrument.
81
What if the terms of the trust cannot be found in the trust instrument? Do any rules apply then?
If the terms cannot be found in the trust instrument then the general rule of trusts apply.
82
What are some of the powers of the general law of trusts and where are they codified?
Power to ensure (Trustee Act 1925, s19); and power to invest (Trustee Act 2000, ss3-10).
83
What is the duty to account?
It is the duty to 1) maintain records and 2) provide information.
84
What documents make up the duty to maintain records?
1) Statement of account; 2) supporting documents.
85
What happens if the trustee fails to maintain records?
It is a breach of trust.
86
When are trustees supposed to provide information regarding the trust?
1) at regular intervals; 2) when important information arises; 3) on request; and 4) at the end of the trust.
87
Who is entitled to receive an account from the trustee? Which case illustrates this?
The beneficiaries and the settlor (Schmidt v Rosewood Trust Ltd). ???
88
Is the disclosure of the letter of wishes to the beneficiary by the trustee mandatory? which case illustrates this?
No it is discretionary (Breakspear v Ackland).
89
If the trustee depletes the assets of a trust, causing detriment to beneficiaries, but has done so under what is allowed by the trust, can liability arise? Which case illustrates this?
No liability does not arise (Speight v Gaunt).
90
Does a trustee doing a favor have to live up to the standards of being a trustee? Which case illustrates this?
Yes even a trustee doing a favor has to live up to standards (Speight v Gaunt).
91
To what degree can a trustee take a risk? Which case illustrates this?
Trustee must take only 'prudent degree of risk' (Barthett v Barclays Bank Trust).
92
Are all trustees put to the same standard? Give an example. Which case illustrates this?
Not all trustees are put to the same standard depending on whether it is for instance a trust corporation vs a lay trustee (Barthett v Barclays Bank Trust Co).
93
What act governs trustee's investment in land? Where can you buy the land? What can you use it for?
You can acquire land in the UK as a freehold or leasehold as 1) an investment, 2) for occupation by a beneficiary, or 3) for any other reason.
94
If the trust is set up to maximize financial gain of the beneficiaries what is the duty of the trustee? Which case illustrates this?
The trustee's duty is to then raise the most money (Cowan v Scargill).
95
How can a beneficiary terminate a trust? Which case illustrates this?
If the beneficiary is of full age and capacity, they may direct the trustee to wind up the trust and carry the property to them (Saunders v Vautier).
96
How would multiple beneficiaries terminate a trust? Which case illustrates this?
They may club together (Saunders v Vautier).
97
Can beneficiaries change trustees as they please? Which case illustrates this?
No they cannot (Re Brockbank).
98
Whether variation of a trust is possible depends on what? Which case illustrates this?
It depends on the trust instrument (Re New).
99
What are the three important ways a trust can be varied?
1) If all beneficiaries consent via (Saunders), 2) if settlor expressly grants trustees a power to amend the terms of the trust, and 3) through court's jurisdiction.
100
Can beneficiaries vary the terms despite the settlors or trustees objection? Which case illustrates this?
Yes they can (Goulding v James).
101
Which act/section gives courts the jurisdiction to vary trust terms? When is this used?
(Variation of Trusts Act 1958 s1). It is used for people who can't consent if it is to their benefit.
102
What is considered 'for the benefit of the person who can't consent' for the purposes of the court's jurisdiction to vary trusts? Which case illustrates this?
The benefit does not have to be financial (negative definition) (Wright v Gater).
103
This case shows that fraud is an exception to proving existence of a trust of land.
Rochefoucauld v Boustyead.

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