L3 Trust definitions

Question 1

• Stack v Dowen + Jones v Kernott

Answer 1

• The HL and SC respectively doubted whether the resulting trust applied in the context of the ownership of the family home.

Question 2

• Saunders v Vautier

Answer 2

• Leading case – It laid down the rule that if all the beneficiaries in the trust are of adult age and under no disability, the beneficiaries may require the trustee to transfer the legal estate to them and thereby terminate the trust.
• Facts: A testator had saved money as a gift on trust for Vautier. According to the terms of the trust, it was to accumulate until V attained the age of 25. The stock dividends could be accumulated along with the capital. Upon reaching the age of maturity (21 at the time) he sought access to the capital and dividends immediately.
• Held: The rights of the beneficiary were held to supersede the wishes of the settlor as expressed in the trust instrument of reaching the age of 25.

Question 3

• Re Smith

Answer 3

• The case concerns the meaning of ‘the interests of the company’.
• Lord Green – explained that the primary duties of a director imposed by the general law is that he should act in what he considers to be the best interests of the company, and not for any collateral purpose.

Question 4

• Gartside v IRC –

Answer 4

• • (my comment from Wikipedia) – remember in a fixed trust the beneficiary has a specific propriety right in relation to the trust fund. In contrast, each beneficiary of a discretionary tryst depends upon the trustee to exercise his or her power.
• Key on case
• Facts: Before his death, the deceased had advanced sums to his son. The court asked whether they were liable to Estate Duty. Lord Reid – explained discretionary trusts as the beneficiaries only receiving something only because the trustees have decided to give it them.