Mutual Wills and Secret Trusts Flashcards
What are mutual wills and when do they apply?
Typically a husband and wife entering a binding agreement intended to be irrevocable. On the death of the first, the survivor is bound to the terms of the agreement: Thomas and Carvel v Carvel.
The surviving spouse may receive a life interest (Re Green) or an absolute interest (Dufour v Pereira).
The only requirement is they are executed mutually.
Morrit J, Re Dale: for doctrine to apply, there must be a contract at law. Necessary to establish agreement to make and not revoke mutual wills. Must find consideration. Performance of promise by execution of will is sufficient consideration.
What are fully secret trusts?
- X formally leaves property to Y by will
- Y is informally made aware during X’s lifetime
- Y is to hold some or all of the property as a trustee for the benefit of Z
Facts and terms must be communicated to and accepted by Y before X dies to ensure reliance: Walgrave v Tebbs
Y appears to be absolute beneficial owner. Constructive trust imposed to prevent Y from unconscionably denying Z rights: McCormick v Grogan.
Acceptance can be by words or silent acquiescence: Moss v Cooper.
Give some case law for fully secret trusts?
Ottaway v Norman: T left bungalow to housekeeper. Understood housekeeper would leave it by will to T’s son. Made will accordingly, but later changed it in favour of Norman.
Brightman J: son entitled to ascertainable assets under secret trust including bungalow and furniture.
Re Boyes: B made gift to executor by will. Previously instructed executor to hold on trust for other person. E accepted during B’s lifetime. Name of P not communicate. Not ascertained until letter found after B’s death.
Held: failed due to uncertainty of object. Would be valid if B had given E sealed envelope with detailed instructions, provided E was aware what the envelope contained and accepted on that basis: Re Keen.
Explain half-secret trusts
- X formally leaves property by will to Y expressly on trust for another
- Y only made informally aware of identity of other
- X must communicate trust to Y. Y must accept before will is executed
If will makes reference to a trust not yet declared, it cannot be half-secret. Void attempt to dispose of estate by non-testamentary instrument: Re Bateman.
Give some case law for half-secret trusts?
Blackwell v Blackwell: T left £12k to S by codicil to will. To apply income for purposes indicated by T to them. 2/3 of capital applied to persons indicated by T to them. Identities of persons orally communicated. Detailed instructions given. Intended trustees accepted trust before codicil executed.
Held: oral agreement evidence was admissible. Valid half-secret trust.
Rawstron v Freud: multimillion pound estate of Freud left residue to daughter and solicitor (“to Y”). Secret trust undoubtedly fully secret if “to Y absolutely”. “To Y” implies “to Y on trust”.
Held: will valid. Y taken absolutely. Might be fully secret but not half, so no failure in timing. “To Y” should raise presumption of absolute disposition.
What is the distinction between a fully and half-secret trust?
Fully secret: Y seemingly absolute beneficial owner.
Half secret: clear Y is not beneficial owner of property.
Watt: distinction is more than a mere matter of words. Risk of fraud is greater in fully secret under which Y seemingly absolutely entitled. Different conceptual foundations.
Fully secret has nothing to do with the Wills Act and can be created before or after the will.
Half secret can only be created when it precedes the execution of a will, so that it is incorporated into will.
What are the formalities for secret trusts?
A secret trust preceding the execution of a will does not guarantee valid half-secret trusts. Terms of trust must be so consistent with later will that Court can deem it incorporated.
Re Keen: K handed sealed envelope to E. E aware envelope contained name of K’s mistress. K executed will. If he had left to E “subject to tursts” would have been valid half-secret trust. However, due to matter of construction, unable to hold trust incorporated. Could only be read subject to future informal dispositions, not those made in past.
