Lecture 1

Question 1

What is a trust?

Answer 1

A legal device which enables one party to hold legal rights for the benefits of another

Question 2

What is a Settlor?

Answer 2

One who creates inter vivos trust i.e creates a lifetime trust when alive and appoints trustees, beneficiaries etc.

Question 3

What is a testator?

Answer 3

One who creates a testamentary trust

Question 4

What is a testamentary trust?

Answer 4

A trust created through a Will

Question 5

What is a trustee?

Answer 5

One who holds the legal title and manages the trust on behalf of the beneficiary

Question 6

What is a beneficiary?

Answer 6

Also known as the object, one who holds equitable title and enjoys the substance of the trust property

Question 7

What is the trust property?

Answer 7

The object which is owned in the trust, usually land

Question 8

What is the relationship between the trustee and beneficiary?

Answer 8

Trustee has an obligation towards the beneficiary
Beneficiary has entitlement towards the trust property

Question 9

What are equitable rights?

Answer 9

Equity grants beneficiary enforceable rights against the trustee which common law doesn’t. Does this for the sake of justice and fairness.

Question 10

What is an express trust?

Answer 10

A trust that is intentionally created by the settlor in writing where trustee and beneficiary are clearly named

Question 11

What is an express private trust?

Answer 11

A trust between a specific settlor, trustee and beneficiary. Unlike an express public trust where the beneficiary would be the public.

Question 12

What are the three certainties for an express private trust to be valid?

Answer 12

1. Certainty of intention
2. Certainty of subject matter (trust property)
3. Certainty of objects (i.e beneficiaries)

Question 13

Can one hold both legal and equitable titles to a trust?

Answer 13

No. Equity is not involved.

Question 14

What is a resulting trust?

Answer 14

Where equity creates a trust to reflect the presumed intent of the parties to ensure the property benefits the person who provided the funds

Question 15

What is a constructive trust?

Answer 15

Where equity decides that the legal owner of the property has behaved unconscionably and thus creates a new trust

Question 16

What is the first certainty of express private trusts?

Answer 16

Intention to create a trust.

Question 17

Which case clarifies that the settlor must manifest an intention to create a trust?

Answer 17

Knight v Knight (1840)

Question 18

How does the law establish whether intentions to create a trust exist?

Answer 18

By analysing the available evidence - it is a question of fact

Question 19

What are the different methods of creating a trust?

Answer 19

1. In writing
2. Trust instruments
3. Wills
4. Orally declared
5. Implied trusts

Question 20

What does Re Gulbenkian’s Settlement (HL, 1970) claim regarding Trust Instruments?

Answer 20

Trust Instruments must be interpreted to reflect the settlor’s intentions and that there must be certainty of beneficiaries, meaning they must be identifiable.

Question 21

What Act allows for the incorporation of extrinsic evidence with Wills?

Answer 21

s.21 Administration of Justice Act 1982

Question 22

Do the three certainties apply to implied trusts?

Answer 22

No, three certainties only apply to express private trusts.

Question 23

What should be noted about interpretation of trusts?

Answer 23

The use of precatory words such as hope, wish, desire, etc. do not constitute a valid trust due to lack of intention.

Question 24

What is the issue of discretion v obligation?

Answer 24

Vague wording in Wills or trusts leave the trust property up to the discretion of the trustee as opposed to being an obligation

Question 25

“to be at her disposal in any way she may think best, for the benefit of herself and her family”

Answer 25

Lambe v Eames (CA, 1871)

Found not to be a trust - left up to her discretion

Question 26

Is the use of the word trust enough to constitute a valid trust?

Answer 26

Tito v Waddell (No.2) (PC, 1977)

No

Question 27

“in full confidence… do what is right”

Answer 27

Re Adams & Kensington Vestry (1844)

No trust, discretion.

Question 28

“I hereby direct… shall at her death be equally divided among the survive said nieces”

Answer 28

Comisky v Bowring-Hanbury (HL, 1905)

Valid trust. Mandatory wording = obligation.

Question 29

Can a trust be created through informal wording?

Answer 29

Paul v Constance [CA, 1977]
“The money is as much yours as mine”
Yes.

Question 30

What are sham trusts?

Answer 30

Trusts which are created to deceive a third party i.e tax collectors. No true intention.

Midlands Bank v Wyatt (HC, 1995)

Question 31

Can conduct reveal intention?

Answer 31

Re Kayford Ltd [1975] Megarry J

Yes.