Secret Trusts Flashcards
2nd
FST or HST
FST- completely hidden from will
HST- will discloses existence of trust but not details
3rd
Formalities
- will must comply with formalities under s9 Wills Act 1837
- secret trust remains even if invalidated
- equity cannot be used as an instrument of fraud
- oral bequests preceding will, will still apply- YOUNG
- can lead to difficulties in identifying STs. Law is inconsistent:
+legatee can claim arrangement never existed to their advantage
+high standard of proof- OTTAWAY
+so stringent rules apply to intention, communication and acceptance
4th
Express or constructive?
FSTs
- Left open to contention in OTTAWAY
- FST- more likely to be CT- ALLAN “at the moment of the testators death a CT arises by operation of law”
4th
Express or constructive?
HSTs
-HST- always express as in BAILIE, so will have to comply with 3 certainties from KNIGHT v KNIGHT
5th
Intention
Same test for both
- testator must have intended to create a trust
- if FST and ET- 3 certainties apply- MARGULIES- to demonstrate intention
- subject matter of a trust must be identified- as was an issue in OTTOWAY
6th
Communication
FSTs
- trust must be communicated and accepted during testators life- TEBBS, BOYES
- acceptance can occur before during or after execution of the will
- existence and terms as are necessary must be communicated- BOYES
- can be oral or in writing, or sealed instructions to be opened after death- KEEN
- ostensible beneficiary must be informed of changes or they don’t apply- COOPER
- different rules to that of a will- FST cannot be altered once made- OTTAWAY
6th
Communication
HSTs
- communication of terms of trust must be made before or at time of will
- need not be written- oral evidence accepted- BLACKWELL v BLACKWELL
- KEEN- sealed letter with enclosed instructions accepted
- changes must be communicated- COOPER
7th
Acceptance
Same rules apply for both
- acceptance need not be express, can be silent- MOSS
- any kind of assent is acceptable, looking at the facts of the case- GROGAN
8th
Standard of proof
- person seeking to establish ST bears burden of proof that trust has been created
- KEEN- generally oral evidence cannot overrule written evidence
- need for higher standard of proof- GROGAN, OTTOWAY
- SNOWDEN- if fraud higher standard of proof, otherwise civil balance of probabilities
9th
Death of beneficiary before Testator
- if no variation, falls into residue
- GARDNER- deemed as bad law so will not apply
9th
Death of trustee before testator
- intended gift should lapse and fall into residue- always for FSTs
- MALLOTT- intended trust will fail and revert to testators estate
- HST- if terms ascertainable trust may remain as ‘equity will not allow trust to fail for want of a trustee’
10th
2 Trustees
Tenants in common
Only those who know of trust are bound- FERRIS
10th
2 trustees
Joint tenancy
Communication before will? All bound
After will? Only those told are bound- STEAD
11th
Conclusion
Will it succeed?
If not:
-FST- property to be held on trust to beneficiaries benefit- TEBBS
-HST- trustees cannot benefit- REES- so passes to next of kin
1st
Issue in question:
- trust or moral obligation- BARLOW
- SNOWDEN- words imposed a moral obligation and no intention to create a trust
