Other Rules On Creation Of A Private Trust Flashcards
What are inter vivos trusts?
A trust created while the settlor is alive
What is a self declaration of trust
Settlor does not convey legal title to trust property to a 3rd party but declares that they themselves hold it for the beneficiary.
When a settlor uses a trustee, what are the 2 requirments that need to be satisfied?
- The settlor must legally transfer the property to the trustee
- The settlor must make a declaration of trust - showing intention with words or conduct satisfying the 3 certainties, beneficiary principle and perpetuity rules.
Formality for trusts of personalty required?
No formal requirments needed
Formal declaration for trusts of land?
Must be written evidence of the declaration of trust signed by the settlor.
Oral declaratiuon is valid if there is document evidence that is signed.
What does constitution mean in trusts?
Transferring legal title to property to another.
For self declarations, is a constitution required?
No as the settlor holds it themselves as a trustee.
Rules of constitution for trusts of personalty?
No formal requirments
Requirments for constitution of land?
Transferror must execute a transfer deed and must be registered with the land registry.
Constitution required for trusts of shares?
Transferor must sign a stock transfer form and register this with the company.
Constitution for chattels
Must intend to transfer the chattels and must deliver them to the donee
Or
Transfer the chattels in a deed.
Constitution for legal title to a bank account
Provide a signed, written notice of the transfer to the bank
What happens if the rulkes of constitution are not followed?
Trust is deemed to be incompletely constituted
What happenbs if a trust has been improperly constituted?
Equity will not finish the job of setting up the trust correctly.
Why will equity not assist a volunteer
If a gift fails, equity will not assist the volunteer as they provided no consideration in return as it was merely a gift and not a contract
5 exceptions to equity will not assist a volunteer
- The every effort test
- Donatio mortis causa - death bed
- Fortuitous vesting - strong v bird
- Proprietary estoppel
- Unconscionability
What is the every effort test?
The trust will be constituted and enforceable where the settlor has done everything in their power to divest trust property.
Eg for shares or land transfers, they have complted all the necessary documents and handed it to the relevant authorities but these authorities have not completed the tyransfer before the transferor died
What is a donatio mortis causa?
A gift made by a person in contemplation of an impending death, also known as a death bed gift.
When will a donatio mortis causa be enforceable?
- The donor delivers the property to the donee in contemplation of imminent/impending death
- Gift will be enforceable immediately on the person dying.
- The donor dies
How will property be delivered in donatio mortis causa?
Handing the item over - eg jewellery
If handing the item is not possible handing over the keys is sufficient eg for cars and land.
What is fortuitous vesting?
The donor intends to make a gift but die before they can transfer the gift. In this case the donee must have also been the personal representative of the donor by will or law.
When will equity allow a fortuitous gift to be perfected?
If the donor has not changed their intention to gift the property to the donee before they die, equity will allow the gift to be perfected and the trust will be valid.
3 requirments for proprietary estoppel?
- There was an assurance - eg allowing someone to use their car and not asking them to stop
- The donee relied on that assurance
- The donee suffered a detriment because they relied on that assurance
What is the unconscionability exception
If a gift is imperfect, it may be enforceable as it would be unconscionable for the donor to go back and change their mind on the promise of the transfer of the gift.
