Paragraph 2 Flashcards
Intention
Again, Glenda’s intention to create a trust must be identified to deem whether this provision constitutes a trust (Milroy v Lord (1862)).
Intention - application
Within this provision, Glenda uses the term ‘in full confidence.’
Precatory words
This is an example of precatory words, suggesting a moral obligation or desire instead of legal obligation (Re Adams & Kensington (1884)).
‘as she sees fit’
Furthermore, the term ‘as she sees fit’ is used by Glenda within this provision which is also an example of precatory words (Lambe v Eames (1871)).
default disposition?
Intention can only be shown through precatory words when there is a default disposition mentioned in the provision, e.g. ‘if Felicity doesn’t use this as I would have used this,’ which is not the case (Cominsky v Bowring-Hanbury (1905)).
certainty of intention?
Therefore, there is no certainty of intention and the trust cannot be valid.
what happens to the property?
This means that there is no obligation on the trustee (Felicity) to give to the beneficiary (Louisa or Harry), therefore the property becomes a gift to Felicity as she is vested legal owner of the property (Lassence v Tierney (1849)).
Irrelevant - type of trust?
Although irrelevant as the test has already failed, as there has been no obligation on the trustee to fulfil the obligations in the trust, by using the precatory term ‘in full confidence’, a mere power of appointment has been imposed upon Felicity.
Power of appointment?
A power of appointment is different from an ordinary trust obligation as, although the trustee is not bound to exercise it, the trustee must, from time to time, consider whether or not to exercise this power (Re Hay’s ST). Therefore, Glenda’s trust is not binding on Felicity to impose, however she must continue to consider whether to impose the property onto Harry and Louisa.
Certainty of object?
In order to establish certainty of object of a power of appointment, the any given postulant test must be applied (Re Gulbenkian). This test means that the trustees must be able to decide whether any hypothetical beneficiary is or is not within the class of objects. As Louisa and Harry are the only possible beneficiaries and identified by Glenda, there is no need to apply this test. Thus, there is certainty of object.
Certainty of subject?
Again, although irrelevant, Glenda’s freehold house is easily identified as the subject of the ‘trust’ and the certainty of interest is clearly the ‘whole’ of her freehold house for either Louisa or Harry. Therefore, there is certainty of subject matter as the freehold house is sufficiently identifiable (Re London Wine Co (1986).
