Formalities and Constitution Flashcards
What do we mean by formalities?
Formalities to transfer equitable ownership of property to beneficiary.
What formalities do you need to comply with to transfer equitable ownership to the beneficiaries?
NONE!
Unless the trust property is land or you will need to transfer an existing equitable interest in the property.
When the trust property is land, what is the formality that needs to be followed?
Settlor’s intention must be in writing and signed.
The land must be detailed properly.
When the exisitng equitable interest a property needs to be transfered for it to be in trust property for the beneficiary, what is the formality that needs to be followed?
The exisiting holder of the equitable interest needs to sign a document and the settlor.
Not needed when the Saunders v vautier can be used by beneficiary.
What does it mean for a trust to be constituted?
Means the trust property legal title/ ownership has been transferred to the trustee.
When this does not happen, the trust fails.
What is another word for trustee?
Donee.
What does ‘equity does not assist a volunteer’ mean? Aka when transfer of legal ownership has not been done successfully.
Means if settlor has failed to constitute a trust (aka transfer legal ownership to trustee), the law will not help - trust will fail.
A self-declared trust will also not be made.
But there are exceptions - equity will assist a volunteer in limited scenarios:
- when the gift is a deathbed gift
- when the settlor did everything in their power to transfer the property’s legal ownership to the trustee - such as they died before the Land Registry could use the forms settlor filled in to transfer legal title of land.
- when the intended trustee is also appointed as the excecutor - the logic is that the legal title will be transferred to them anyway.
What happens when settlor fails to give certainty to subjects?
Trust fails - trust property reverts back to the settlor.
When a self-declared trust is made, does legal title/ownership need to be transferred?
No. As the trustee is the settlor…
How is a property constituted?
Different methods need to be used for the different assets.
For physical objects: legal ownership is transferred when it is delivered to the trustee.
For stock/ shares: legal ownership is transferred when a stock transfer form has been filled and the share certificate has all been sent to the Companies House.
For registered land: complete a transfer deed and then register the new ownership in the Land Registry
What are the exceptions to the ‘equity will not assist a volunteer’?
But there are exceptions - equity will assist a volunteer in limited scenarios:
- when the gift is a deathbed gift
- when the settlor did everything in their power to transfer the property’s legal ownership to the trustee - such as they died before the Land Registry could use the forms settlor filled in to transfer legal title of land.
- when the intended trustee is also appointed as the excecutor - the logic is that the legal title will be transferred to them anyway.
When the execption of wish made on the deathbed for the ‘equity will not assist a volunteer’ is used - what is the critieria that should be satisfied?
- The wish is made when donor believes they are dying imminently.
- Means of control over the property is given to the trustee - donor gives the donee the keys to the house or the share certificates
- The donor intends to make the trust conditional on the fact that they do indeed die - aka this is them exercising their last resort. They are in extrenuating circumstances here … had they had enough time, they would have followed th 3 certainties and constituted the trust, they may have even made a different person the trustee.
