formalities - trusts

Question 1

what are the 4 formalities that are required for a trust of land?

Answer 1

1. manifested and proved
2. some writing
3. signed by some person who is able to declare such trust
4. by will

Question 2

what happens if the formalities are not adhered to for a trust of land?

Answer 2

the trust becomes unenforceable = therefore, beneficiaries cannot enforce their rights

Question 3

what is constitution?

Answer 3

this is the transfer of legal title from one party to another

Question 4

does a self declaration of trust require movement of the legal title?

Answer 4

no it does not require movement of the legal title because the legal title to the property is already vested in the settlor who has self-declared the trust.

Question 5

when does constitution take place for a testamentary trust?

Answer 5

a testamentary trust is a trust that is created via a will therefore, constitution takes place via the will.

Question 6

how is the legal title transferred for registered land?

Answer 6

transfers are made by a deed and legal title passes on registration of the new owner at the land registry

Question 7

how is legal title transferred for shares?

Answer 7

for a private company they are transferred by the transferor signing a stock transfer form and sending it to the company.

legal title passes when the transferee is registered in the company’s internal register of members

Question 8

what is the effect of constitution on the settlor?

Answer 8

the settlor ceases to have any beneficial or legal interest in the trust property as the trustee now holds legal title and holds it on trust for the beneficiary

Question 9

what is the consequence if there is failed constitution of a trust?

Answer 9

the trust is void as the property has not been vested in the trust

Question 10

what is the principle that was established in Milroy v Lord?

Answer 10

equity will not perfect an imperfect gift

Question 11

what are the 3 methods of transferring property?

Answer 11

1. an outright gift
2. transfer on trust
3. self declaration of trust

Question 12

can a failed gift be treated as a self-declaration of trust?

Answer 12

no it cannot - Milroy v Lord

Question 13

when does Re Rose exception apply?

Answer 13

1. the correct method of transfer is used
2. transferor has done everything in their power to effect the transfer
3. the documentation ends up in the hands of the person/organisation capable of effecting the transfer

Question 14

if a person does everything in their power to transfer the property - does the rule in Milroy v Lord apply?

Answer 14

yes it does - even if they dont end up sending the doc to the necessary party (eg, send land registry the doc for the registered land)

Question 15

if a transferor has sent the docs to their own agent (eg, solicitor or accountant) - does Re Rose apply?

Answer 15

no it doesnt - this is not sufficient as agency is revocable

Question 16

can the rule in Re Rose be used to perfect imperfect gifts and perfect imperfect trusts?

Answer 16

yes it can be applied to the perfection of both gifts and trusts

Question 17

what are the 4 exceptions to the rule in Milroy v Lord?

Answer 17

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

Question 18

what is tortious vesting (strong v bird)?

Answer 18

operates where a gift is made to a donee who subsequently obtains legal title to it by becoming the donor’s personal representative

Question 19

what are the 3 conditions which must be met in order for the rule in strong v bird to apply?

Answer 19

1. there must be an intention to make an immediate gift
2. the intention must continue until the donor’s death
3. the intended donee becomes an executor (or one of the executors) of the donor’s estate

Question 20

when does donationes mortis causa apply?

Answer 20

when a person contemplates their imminent death and wishes to leave their property to another person but doesn’t have time to execute a will.

Question 21

what are the conditions that need to be met (there are 3) for a DMC (donationes mortis causa)?

Answer 21

1. gift is made in contemplation of death which the donor believes is imminent
2. the gift is conditional on death
3. there is delivery of the property (donor must part with the control of the property by handing it or something which represents title to the donee