INTRO Flashcards
Key terms
What is a trust?
A trust is where one or more parties hold and can deal with the legal title of property on behalf of somebody else
Characteristics of a trust
a trust is equitable, an obligation, binds the trustee, concerns property either tangible or intangible, it is for the benefit of a person, its beneficiary may enforce it, it may be for charitable purposes enforceable by Attorney-General, it may, exceptionally, be for a non-charitable purpose
What is a beneficiary?
The beneficiary owns the actual value of the property and in most, but not all, cases can control the actions of the trustee
What is a fiduciary relationship?
It is where one person reposes trust and confidence in another for that other to manage his/her affairs.
e.g. trustee- beneficiary
What is legal ownership?
A trustee is said to hold the legal ownership of property (person who controls and administers the trust)
What is beneficial ownership?
Beneficial/equitable/proprietary interest is held by the beneficiaries
What are the different types of trust?
Express trust, resulting trust and constructive trust
What is an express trust?
A wishes to make a provision for his underage children whom by law are incapable of holding property for themselves. He asks T (a trustee) to hold the property on trust for his children.
What is a resulting trust?
A and B purchase a house in joint names. A and B contribute equally to the purchase money of the house. The house is conveyed solely into A’s name. There is no express trust because s53 (1)(b) of the Law and Property Act 1925 stipulates that trusts of land have to be evidenced in writing. In this case the presumed intention of A and B is that they share the house equally, otherwise they would not have contributed equally to the purchase price. In this case B’s beneficial ownership results back to B
What is a constructive trust?
A asks B to hold a house on trust for C, but again does not comply with the prescribed statutory formalities. In the absence of the evidentiary formal requirements B fraudulently purports to claim the house for himself and not for C. The courts will not permit statutory formalities to be used as an instrument for fraud and will defeat B’s fraudulent intention by imposing a constructive trust on B ensuring that the actual/beneficial ownership of the house is held for C.
What is a donee?
the recipient of a gift
What is an inter vivos trust?
a trust created by a living person, usually called the settlor
What are common law actions?
actions of right so that once a breach of a common law right has been established you are automatically entitled to relief from the courts. These are often called rights in personam, that is they are personal rights, usually comprising of a right to sue so that they rank in terms of priority with general creditors in terms of insolvency.
What is insolvency?
A bankrupt person can be sued by general creditors with a priority given to secured creditors, but if somebody can establish a proprietary right that right will prevail before all other creditors
What is a proprietary right?
If one can establish a proprietary right, which beneficiaries under a trust can usually do, they will recover whatever is left of their property in insolvency thus having priority over all other creditors. These are rights in rem.
