Formalities & Constitution Flashcards
What are the four criteria required to create a valid, private trust?
Formalities
Constitution - (legal ownership is vested in the trustee).
The Three Certainties
The trust must not be contrary to public policy & perpetuity rules.
What is the only formality?
The intention to create a trust (can be made orally).
What is the requirement for trusts of land (with the section)?
s.2 of the LP(MP)A 1989 states that to create a trust of land, the contract must be in writing.
What are the two requirements for trusts created by will (with the section)?
s.9 of the Wills Act 1837
The will must be in writing.
The will must be witnessed by two witnesses.
What are the two requirements for transferring an existing interest under a trust (with section & two cases)?
s.53(1)(c) of the LPA 1925.
The declaration of trust must be in writing.
The declaration of trust must be signed by the party creating the trust.
Grey v IRC [1960] A.C 1 - where there is no writing, there is no disposition.
Vandervell v IRC [1967] 2 AC.C 291 - the exception is that if the legal and equitable title are being transferred together, there is no need for a separate disposition of the equitable interest.
What happens to the legal title on death?
The legal title transfers automatically.
What are the three ways of transferring property to someone else via inter vivos (with the leading authority)?
Milroy v. Lord [1862] 7 WLUK 110.
Transferring the legal & equitable title to the other person e.g. via a gift.
Transferring the legal title to a trustee.
Declaring oneself as a trustee (the trustor and the trustee become the same person).
What are the four ways of transferring property to someone else?
Money, chattels, shares & land.
What are the three criteria that must be satisfied in order to transfer money?
Intention.
Identify the property.
Some act to show intent to transfer the legal title (e.g. a cash or a cheque being present).
What are the two ways to transfer chattels?
Physical delivery & intention.
Deed.
What are the two cases regarding chattels & what do they state?
Words alone are insufficient - Re Cole (1964) Ch 175.
There can be an oral transfer as long as the means of acquiring physical possession is given - Jaffa v Taylor Gallery Ltd (1990) The Times 21st March.
What are the two requirements for transferring land (with sections & case)?
s.52 of the LPA 1925 - the transfer to the trustee requires a deed.
s.7 of the LRA 2002 - if the land is registered, the trustee’s name must be in the Land Registry - Mascall v Mascall (1984) 50 P & CR 119.
What are the three requirements for transferring shares (with the case & principle)?
The settlor must sign the stock transfer form and send the share certificate to the company.
The shares are not deemed to be transferred until the company enters the new name.
If the settlor has done everything within their power, the trust may still be deemed to be fully constituted - Re Rose [1952] 1 All ER 1217 (The Re Rose principle).
Which case relates to unconscionability & what are the facts?
Pennington v Waine [2002] 1 WLR 2075 - The donor executed the transfer form with the intention for it to have immediate effect. It was unconscionable as the nephew had gone through the effort of applying to become a director, therefore it would have been unfair (unconscionable) for the donor’s promise to not have been fulfilled.
What are choses in action?
These are intangible rights, recognised by law & equity as being property.
What are three examples of choses in action?
Debts, shares & beneficiaries’ interest under a trust.
What are the two types of chose in action (with examples)?
Legal chose - debts & rights under a contract
Equitable chose - beneficaries’ interest under a trust.
What are the two ways of transferring the legal title to a chose in action?
Legal Assignment
Equitable Assignment
What are the three requirements for legal assignments (with section & case)?
s.136 of the Law of Property Act 1925.
Absolute - you must transfer the right to enforce the full debt or the contract.
Writing - the notice must be in writing and given to the debtor - Warner Bros Records Inc v Rollgreen Ltd [1976] 1 QB 430 (CA) 443-44 suggests that later notice would be suffiicent.
Must concern a debt or other legal thing in action.
What are the three requirements for equitable assignments (with case)?
Phelps v Spon-Smith & Co (May 2000) laid out the main three requirements:
Intention to assign.
The assignment must sufficiently identify the chose.
There must be some act by the assignor showing the transfer to the assignee.
What are the three non-requirements for equitable assignments (with case)?
Doesn’t need to be absolute if it is a debt - Deposit Protection Board v Dalia [1994] 1 ALL ER 539
Doesn’t need to be in writing if there is intention.
No notice is required.
What is non-assignable property?
What are the three examples?
These are rights that are not assignable in equity, statute & choses in action.
Non-assignable contracts.
Personal contracts.
Mere rights of litigation.
What is an incompletely constituted trust?
This is where there has been a failure to transfer the legal title to the trustees.
What is the rule in Strong v Bird (1874) 18 Eq 315?
Equity will provide assistance to complete a trust that has not been completely constituted.
What is fortuitous vesting?
If the testator appoints the donee as an executor of his will, ownership of the property transfers to the donee and, this can be used to complete the gift to the donee.
What are the two requirements that must be met in order for fortuitous vesting to work (with the case)?
The intention to make the gift to the donee must have continued until the testator’s death.
The donee must be appointed as an executor.
Re Stewart [1908] 2 Ch 251 - it applies to all imperfect inter vivos gifts.
Which case highlights consideration & what is the principle?
Re Ellenborough [1903] 1 Ch 697
If a beneficiary has given consideration for the promise, they can rely on a contractual remedy & equity can perform the contract & constitute the trust.
What is a marriage settlement (with three cases)?
This is a settlement where the promise has to be made before the marriage takes place as the marriage is the consideration.
Re Plumtre’s Marriage Settlement [1910] 1 Ch 609 - the only surviving relative hadn’t given consideration so they could not enforce the covenant.
Pullan v Koe [1913] 1 Ch 9 - the wife received property but did not transfer it to the trust.
Re Pryce [1917] 1 Ch 234 - there were no children so the only remaining beneficiaries were more distant relatives.
