Half Secret Trusts

Question 1

What is a half secret trust?

Answer 1

The trust is recognised by the will but the beneficiaries are not mentioned. The trust is floating in existence waiting to be used and the will triggers it. Secret trusts operate outside the will changing nothing written inside it.

Question 2

What does s.15 of the Wills Act 1837 state?

Answer 2

A person that witnesses a will as one of the two necessary witnesses cannot benefit under the will.

Question 3

What happened in Re Young?

Answer 3

A chauffeur witnessed a will and he was also a beneficiary under a half secret trust. He could take beneficial interest because he took his property under the trust rather than under the will itself.

Question 4

What happens to the will if a witness takes a gift under s.15 of the Wills Act 1837?

Answer 4

The gift to the witness is void, but the will is still valid.

Question 5

What happened in Re Gardener (No 2)? about gifts.

Answer 5

If you create a will and leave money to F and F dies before you, then nothing happens to the money it forms part of your residue estate. If the property has been left as a gift in the will, it would have failed.

Question 6

Does the dehors will theory apply to half secret trusts?

Answer 6

Yes.

Question 7

Are the requirements the same as fully secret trusts?

Answer 7

Yes, intention, communication and acceptance.

Question 8

What differs in the requirements between half secret and full secret trusts?

Answer 8

Communication must take place before or at the same as the will is executed.

Question 9

What happened in Blackwell v Blackwell?

Answer 9

The testator wished to provide for a lady and her illegitimate son. The testator left £12k to 5 people in the trust for purposes indicated by them.
HELD: valid half secret trust, because there had been communication in a codicil before the codicil was executed which created the half-secret trust.

Question 10

What did Viscount Sumner say about changing your mind in Blackwell v Blackwell?

Answer 10

You can’t keep changing your mind without making a new will.

Question 11

What happened in Re Keen?

Answer 11

A testator left £10k to two people, indicated the need for future communication with the testator.
HELD: the requirement of future communication made it void.

Question 12

What 3 ways can communication occur for half secret trusts?

Answer 12

1. Orally or in writing
2. By sealed letter as long as the recipient knows that the letter contains the terms of a trust (Re Keen)
3. The intended trustee must know what property is impressed with a trust, if the testator makes any additions the the testator must inform the trustees.

Question 13

What happened in Re Colin Cooper?

Answer 13

Original trust of £5k valid for proper communication, further £10k failed because he did not tell the trustees about it which was in a codicil

Question 14

Do half secret trusts of land need to be evidenced in writing to comply with the s.53(1)(b) LPA 1925?

Answer 14

If expressed, yes.

Constructive no, which is a half secret trust

Question 15

If there us a conflict between the express declaration and the will what happens? Re Keen

Answer 15

sealed letter handed to the trustees before the will was executed but the court would not accept it as evidence, because it conflicted with the will which pointed to future communication

Question 16

Can you introduce new communication after the will is made with half secret trusts?

Answer 16

No.

Question 17

What happened in Re Rees W.T.?

Answer 17

The trustees argued that the testator intended them to have the surplus after certain purposes were carried out.
HELD: evidence would not be accepted because it conflicted with the will.
If a solicitor wishes to claim he is a beneficiary this should be clear spelled out.

Question 18

What happened in Re Tyler?

Answer 18

Note written by the trustee himself of a conversation he had with the testatrix.
HELD: evidence was not clear enough to show that the trustee was intended to be a beneficiary

Question 19

Since half secret trusts are recognised by the will, what form will they always take?

Answer 19

Joint tenants, a half secret trust won’t be valid unless there is communication before or at the time of the will meaning they are all bound.

Question 20

Can the testator change their mind?

Answer 20

Yes they can do this at any time.

Question 21

What happens when a trustee dies? state

Answer 21

Right of survivorship s.18(1) Trustees Act 1925, where ther sole trustee dies, you can choose a new one s.18(2) Trustees Act 1925. Equitable maxim, the court will not allow a trust to fail for want of a trustee.

Question 22

Who says half secret trusts aren’t difficult and why?

Answer 22

Wilde (1995)- half secret trusts normally created by solicititors, there isn’t difficulty as a solicitor is involved to provide all the advice to their client to make sure communication occurs before or at the time the will is executed.

Question 23

How secret is a half secret trust? Larke v Nugus and what academic that taught you?

Answer 23

Steve Evans (2014), Larke v Nugus, for litigants to obtain information from the solicitor about the circumstances surrounding the creation of a half secret trust, they can ask for the solicitors attendance notes which will identify the beneficiaries.

Question 24

What happened in Rees W.T.?Trust or Gift

Answer 24

It was construed as a trust, ‘unto my trustees absolutely they well knowing my wishes concerning the same’. The court rejected this as a half-secret trust.

Question 25

What happened in Rawstron v Freud?

Answer 25

Freud left his residue estate to Diana Mary Rawstron and Rose Pearce jointly. Rawstron was Freuds solicitor. Court was invited to look to see what the clause meant. C was his son who argued that there was really a half secret trust, argued this to information on the trust details including beneficiaries.
HELD: it was a gift to Rawstron and Pierce, the natural words did not name them as trustees.
Freud had created a half secret trust in 2004 and then gifted R in 2006 separately. R and P admitted the existence of a fully secret trust, but were not obliged to say anything else.

Question 26

What does the case of Rawstron v Freud demonstrate?

Answer 26

That fully secret trusts reign supreme, if you want secrecy its best to create a fully secret trust.