Gifts & Trusts

Question 1

What are the 3 certainties? Case.

Answer 1

Knight v Knight:

1. Intention.
2. Subject matter.
3. Object.

Question 2

What 3 further requirements must a trust meet?

Answer 2

1. Properly declared.
2. Beneficiary principle.
3. Rules against perpetuities.

Question 3

When declaring a trust, must the settlor use the word ‘trust’ in order for there to be certainty of intention? Case.

Answer 3

No, provided the intention is clear - Paul v Constance.

Question 4

What type of wording must/must not be used when declaring a trust in order for there to be certainty of intention? Case.

Answer 4

Precatory wording must not be used; an obligation must be imposed - Re Adams and Kensington Vestry.

Question 5

Will phrases such as ‘the bulk’ of be sufficiently clear for certainty of subject matter? Case.

Answer 5

No - Palmer v Simmonds.

Question 6

Will phrases such as ‘reasonable income’ of be sufficiently clear for certainty of subject matter? Case.

Answer 6

Yes, if workable formula available, but probably won’t work for capital - Re Golay.

Question 7

Must gift/trust property be segregated from like non-gift/trust property? Case. What is the exception? Case.

Answer 7

Yes - Re London Wine Co, unless property is intangible - Hunter v Moss.

Question 8

What is the test for certainty of object for fixed trusts? Case.

Answer 8

Complete list test - IRC v Broadway Cottages.

Question 9

What is the test for certainty of object for discretionary trusts? Case.

Answer 9

Given postulant test - McPhail v Doulton.

Question 10

What guidance was given for the given postulant test? Case/judges.

Answer 10

Re Baden’s WT.

1. Stamp - ‘don’t knows’ means trust fails.
2. Sachs - postulant must prove he falls within class.
3. Megaw - if enough fall within class, trust succeeds.

Question 11

What is the test for certainty of object for power of appointment? Case.

Answer 11

Given postulant test - Re Gestetner’s Settlement.

Question 12

Even where there is certainty of object, for what 2 reasons might a trust fail? Cases.

Answer 12

1. Administrative unworkability - ex parte West Yorkshire Metropolitan CC.
2. Capriciousness - Re Manisty’s Settlement.

Question 13

How must a trust be declared? 3 ways, authorities.

Answer 13

1. Personalty - no formality.
2. Land - signed writing - s53(1) LPA.
3. Will - signed w/2 witness - s9 Wills Act.

Question 14

What is the beneficiary principle? Case.

Answer 14

Must be ascertainable human beneficiary to enforce the trust - Morice v Bishop of Durham.

Question 15

4 exceptions to the beneficiary principle? 2 cases.

Answer 15

1. Animals - Re Hooper.
2. Graves - Re Dean.
3. Charitable trusts.
4. Denley trusts.

Question 16

Why will a charitable trust not violate the beneficiary principle?

Answer 16

Enforced by the Attorney-General.

Question 17

What 3 criteria must a charitable trust meet?

Answer 17

1. Charitable purpose.
2. Public benefit.
3. Exclusively charitable.

Question 18

What guidelines does the Charity Commission give on ‘public benefit’?

Answer 18

Must provide a tangible benefit to the public at large, and benefit must be closely connected to charity’s aims.

Question 19

In what 2 situations will an organisation not have a ‘public benefit’? Cases.

Answer 19

1. Beneficiaries connected by family - Re Compton.

2. Beneficiaries connected by employment - Oppenheim v Tobacco Securities Trust Co.

Question 20

How will a non-charitable purpose trust be saved? Case.

Answer 20

If ascertainable beneficiaries derive a tangible benefit, they can enforce the trust - Re Denley.

Question 21

How will a gift without a purpose to an unincorporated association be saved? Case.

Answer 21

As a gift to members, as accretion to club funds, to be used according to the club’s rules - Re Recher’s WT.

Question 22

In what 2 ways may a gift with a purpose to an unincorporated association be saved? Case.

Answer 22

Re Lipinski:

1. Under Re Recher’s WT construction.
2. Under Re Denley construction.

Question 23

What type of association will not be allowed to receive a gift? Case.

Answer 23

One which has a business purpose - Conservative & Unionist Office v Burrell.

Question 24

In order not to offend the rule against inalienability of capital, what must a club’s rules allow? Case.

Answer 24

It must allow the members to dissolve the club and distribute the capital - Re Grant’s WT.

Question 25

In order not to offend the rule against inalienability of capital, to how long must a purpose trust be limited?

Answer 25

21 years.

Question 26

How must chattels be delivered? Case. Alternative? Case.

Answer 26

Physical delivery - Re Cole, or by deed - Jaffa v Taylor.

Question 27

How must company shares be transferred? 3 steps.

Answer 27

1. Complete Stock Transfer Form. 2. Give STF & Share Certificate to transferee. 3. Transferee must be named on Company Register as new owner.

Question 28

How must land be transferred? 3 steps, authorities.

Answer 28

1. By deed - s52(1) LPA. 2. Deed complies with s1(2) LP(MP)A. 3. Transferee registered at Land Registry as new legal owner - s27 LRA.

Question 29

How must an equitable interest under a trust be transferred? Authority/case. Exception? Case.

Answer 29

Signed writing - s53(1)(c) LPA; Grey v IRC. Except where held on bare trust, and equitable owner instructs legal owner to transfer legal title to transferee with aim of benefitting that transferee. Equitable ownership moves automatically with legal ownership - Vandervell v IRC.

Question 30

As a general rule, will Equity perfect an imperfect gift? Case.

Answer 30

No - Milroy v Lord.

Question 31

What is the 'every effort' exception? Case. Case which applies the principle to land?

Answer 31

Re Rose - if transferor has done all legally required of them, Equity will deem gift to be perfect.

Question 32

What is the exception in Pennington v Waine?

Answer 32

Equity will perfect gift where 'unconscionable' for transferor to resile. Limited circumstances - transferor told transferee they didn't need to do anything, and aim of transfer was to make transferee Company Director.

Question 33

What is the exception in Strong v Bird?

Answer 33

Where transferor intended to make immediate gift, intention remained unchanged until death, and transferee becomes transferor's PR, transferee entitled to keep the property.

Question 34

What is the exception in Choithram v Pagarani?

Answer 34

No difference between declaration of self as sole trustee and declaration of self as one of a number of trustees. If the transferor's conscience is affected, Equity deems it unconscionable for him to resile from the gift.