INTRO TO TRUSTS Flashcards
What is a trust?
Allows more than one person to own property -> trustee owns property for beneficiary
Which case did LORD BROWNE-WILKINSON give the four elements of a trust?
WESTDEUTCHE LANDESBANKE v ISLINGTON LBC 1996
What are the 4 elements of a trust as per Lord Browne-Wilkinson?
- It’s equitable
- Gives beneficiary rights in property
- Imposes duties/obligations on a trustee
- Duties/obligations are fiduciary in nature
What does fiduciary mean?
Based on loyalty and good faith, but given legal standing
Three separate types of trust
EXPRESS
RESULTING
CONSTRUCTIVE
The 3 parties involved in a trust
- Settlor
- Trustee
- Beneficiary
Describe a settlor
They have absolute title to the property and then set up a trust
Gives legal title to trustee
Gives equitable interest to beneficiary
Describe trustee
Has legal title vested in them
Have duties/obligations as per the trust document
Three different types of trust document?
- Bare trust = single beneficiary
- Fixed trust = multiple benficiaries
- Discretionary trust = trustee has power of discretion as to what beneficiaries receive
Describe beneficiary
Has equitable interest in the property
Rights are dependent on what type of trust it is
SAUNDERS 1841
- Absolutely entitled beneficiaries who are of age/sound mind can direct trustee to deliver trust property (legal title)
- This makes beneficiary absolute owner/s
What is a resulting trust?
When a trust is found to be implied by the courts
Two situations for a resulting trust?
- No certainty of objects (beneficiaries) so settlor becomes the beneficiary
- Where a person has contributed to the cost of property they are entitled to equitable interest in percentage they paid for
What is a constructive trust
Courts impose a trust onto an individual who has acted unconscionably in an attempt to create an equitable outcome
