Secret Trust

Question 1

Kasperbauer v Griffith

Answer 1

The requirements for the trust to be enforced are:

1) intention to create trust;
2) communication of the trust to the intended trustee;
3) acceptance of the trust by the trustee

Question 2

Wallgrave v Tebbs

Answer 2

Communication of the existence of trust must take place before death. If instruction were found after death there is no valid trust

Question 3

Re Boyes

Answer 3

If the trustee was communicated about the existence of trust, but not on the terms, it will be resulting trust

Question 4

Re Collin Cooper

Answer 4

Testator left 5000 and communicated trustees about them. Later he increases sum to 10000, but the trustees were not communicated.
Held: 5000 was subject to trust, other 5000 was held on resulting trust

Question 5

Re Keen

Answer 5

There will be sufficient communication if the terms are given to intended trustee enclosed in a sealed envelope, to be opened after the testator has died.

Question 6

Re Stead

Answer 6

If the gift is to two joint tenants all are bound if communication took place before the execution of the will.

Question 7

Moss v Cooper

Answer 7

Consent either by words or by silence

Question 8

Ottaway v Norman

Answer 8

Testator left his freehold bungalow to his housekeeper. It was agreed that she will devise it to testator’s son in her will, which she failed to do.
Held: the son is entitled to the bungalow on the basis that obligation was imposed and accepted. the means of carrying out is immaterial.

Question 9

Blackwell v Blackwell

Answer 9

Half secret trust is valid if the communication of terms was made before the execution of the will.

Trustee of fully secret trust will not be allowed to defeat he testator’s purpose by renouncing the legacy

Secret trusts operate outside the will and is not subject to the Wills act. Communication and acceptance create the trust inter vivos. The will does not create the trust, it is merely device for constituting it by transferring the property to trustees.

Question 10

Re Bateman’s Will Trust

Answer 10

Whenever the trust is communicated it will fail if the will allows for the future communication

Question 11

Re Young

Answer 11

Beneficiary of fully secret trust witnessed the Will that contradict s 15 of Will’s act (under this section he can not benefit). Beneficiary of secure trust can benefit as he was arranged outside the terms of will and so should be unaffected by the Wills Act

Question 12

Re Gardner No2

Answer 12

Secret beneficiary predeceased the testator. But the gift not lapses because secret trust is valid on communication and acceptance and that on testator’s death interest passes to beneficiary’s estate by agreement, not by will.

Question 13

Re Maddock

Answer 13

Trust will fail if the secret trustee dies before testator or disclaims the gift.