Formalities for Express Trusts Flashcards
What are the three things a full legal owner can do gratuitously with their property?
Make a gift
Declare themselves to be a trustee
Transfer the property on trust
How does legal title move with a gift?
Transfer of full legal ownership from one person to another.
Only legal title needs to be considered here.
What happens to legal and equitable title for a self-declaration on trust?
Legal title stays same - consider if any formalities for equitable title.
What happens to both titles on a transfer on trust?
Legal title moves and equitable title also - consider formalities for both types of title.
What formalities must be completed for a trust of non-land property?
None - think to Paul v Constance
If there is a transfer on trust, what must you consider regarding the legal title?
Different formalities for constitution depending on the nature of the item.
What happens if a will does not comply with the Wills Act?
It will be void - no gifts or trusts created in the will can take effect.
What formalities apply for a trust of land?
S 53(1)(B) A declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will.
How has s53(1)(b) been interpreted?
Declaration and writing don’t have to happen at the same time.
Writing simply must show settlor’s intention to create the trust and the terms of the trust
What happens on non-compliance with s53(1)(b)?
Trust is unenforceable, not void.
If it becomes enforceable (e.g. formalities are complied with) beneficiary can enforce their rights from declaration.
What happens if a trust of land has been legally constituted but does not comply with the formalities of s53(1)(b)?
Case law has used several different methods to enforce the trust, despite the lack of formalities.
Equity will not allow a statute to be used as an instrument of fraud.
What is constitution?
The transfer of legal title from one party to another
How do the formalities for transferring legal title vary according to the nature of the property in question?
Registered land: Made by deed and registered with the Land Registry. Legal title passes on registration
Shares: transferor must sign a stock transfer form and send it to a company. Title passes when transferee is registered in the company’s internal register of members.
Choses in action: Written transfer, and notice in writing to the debtor or to the bank. Title passes once notice has been received.
Chattels can be transferred by: Deed of gift, delivery of chattel with evidence of the transferor’s intention to transfer.
Cheques: Transfered to a third party by endorsing the cheque by signing name on the back.
What is the effect of constitution?
Disposition is irrevocable
What happens if trust property is not vested in the trustees?
Trust is incompletely constituted and therefore void.
Equity will not assist a volunteer / perfect an imperfect gift.
What must a transferor do to effect the disposition that they intend?
They must do ‘everything necessary’ by following the correct method for transferring legal title.
What are the four exceptions to the rule in Milroy v Lord?
The principle in Re Rose
Unconscionable principle
Fortuitous vesting
DMC
What is the principle in Re Rose?
Is the transferor has done everything within their own power - equity may regard the transfer as complete.
Title on constructive trust, pending full legal title.
Give examples of the Re Rose exception?
Transfers / share certificates delivered to company registrar but not registered - effective in equity when delivered.
What three things are required for the Re Rose exception to be valid?
Correct method of transfer has been used
Transferor has done everything within his own power to effect the transfer
Documents ended up in the hands of the person capable of effecting the legal transfer
How did Mascall v Mascall extend Re Rose?
Extended it to registered land, and also established that it is not necessary for the transferor to send the documents to the person capable of completing the transfer.
Transfer becomes irrevocable once the transferor puts the matter beyond their own control.
Sending it to your own agent is NOT irrevocable.
When can equity perfect an imperfect gift?
When it would be unconscionable for the donor to resile from it.
Court will imply a constructive trust to hold that it would be unconscionable to resile from gift.
What is fortuitous vesting / the rule in Strong v Bird?
A failure to perfect is remedies by obtaining legal title through another route.
Normally occurs because the intended recipient of a gift is also the personal representative of the transferor’s estate.
Can apply even if the intended recipient is one of several executors / administrators.
What conditions must be met for the rule in Strong v Bird to apply?
Intention to make an immediate gift
intention must continue until the donor’s death
Intended donee becomes an executor (or one of the executors)
What is a donationes mortis causa?
Deathbed gift - only valid once Cain v Moon conditions have been fulfilled.
Gift is made in contemplation of death
Gift is conditional on death
Delivery of property - donor must part with dominion of the property [no need for the full transfer of legal title]
