Secret Trusts Flashcards
Onus is on the person claiming that the trusts exists on the balance of probabilities
Re Snowden
Requirements for a valid secret trust
Kasperbauer v Griffith:
- an intention by the testator to create a trust binding an inheritor of the property
- communication of the trust to the intended trustee
- acceptance of the trust by the trustee
Statement that wife “knows what she has to do” with the house was too vague to create legal obligation on wife
Kasperbauer v Griffith
“knowing his wishes” and “giving what’s appropriate” did not create legally binding obligation
Margulies v Margulies
Fully secret trust- communication must take place before death, whether before or after signing the will
Walgrave v Tebbs
Existence of trust must be communicated
Walgrave v Tebbs
Terms of the trust must be communicated
Re Boyes - if terms not communicated, property held on resulting trust
Property subject to the trust must be communicated
Re Colin Cooper
Envelope given to intended trustee during the testator’s lifetime, only to be opened after testator’s death was sufficient communication, provided that the trustee is aware that the envelope contains terms of the trust and accepts it on that basis
Re Keen
Communication not made to all trustees?
General rule: only those to whom communication is made are bound by the trust
If gift is to joint tenants, as opposed to tenants in common, all are bound if communication to any one took place before the execution of the will. If communication took place after execution, only those to whom communication was made are bound by the trust
Re Stead
Re Stead does not apply to half secret trusts if the will permits communication to be made to only one of the intended half-secret trustees, when such communication is made before or at the time of executing the will
Re Gardom
Acceptance of the trust can be express or inferred or by silence (acquiescence)
Moss v Cooper
In reliance of the acceptance, the gift is made/left unrevoked
Moss v Cooper
In reliance of the acceptance, the deceased refrained from making a will
Strickland v Aldridge
Carrying out the secret trust: in most cases the obligation is to make some intervivos transfer of property, but may also apply to an obligation to make a will in favour of the secret beneficiary
Ottaway v Norman
Half secret trust arises where it is clear from the face on the will that the property is left on trust, but the will does not contain the terms of the trust
Blackwell v Blackwell
For half-secret trust, communication must take place before or at the time of the execution of the will
Re Keen, following obiter in Blackwell v Blackwell
Will allowed for future communication of half-secret trust so trust failed
Re Bateman’s WT
Consistency with the will is essential - will left property to trustees “as may be notified to them during my lifetime”. Sealed envelope containing terms given to trustees before will executed. Trust failed for reference to future communication, inconsistent with communication already made
Re Keen
Liberal decision allowing a beneficiary under a half-secret trust to benefit from will that he witnessed due to the dehors the will theory
Re Young - but beneficiary does take by virtue of a testamentary disposition as testator can change mind up until death.
Trustee witnesses will?
s15 Wills Act - person benefits from will cannot witness it
But trustee does not take the legacy beneficially, so s15 should not defeat the trust?
Gift of secret predeceasing beneficiary was held not to lapse
Re Gardner (No 2) - but this decision should not be followed
Fully secret trust will fail if the secret trustee predeceases the testator or disclaims the gift
Re Maddock
Trustee of a fully secret trust will not be allowed to defeat the testator’s purpose by renouncing the legacy - the trust will not fail because the trustee fails to carry out his duties
Blackwell v Blackwell
Equity will ensure that the intended trustee holds the property on trust, rather than fraudulently keeping it
McCormick v Grogan
Dehors the will theory
Blackwell v Blackwell - secret trusts operate outside the will and therefore are not subject to the Wills Act; the will is merely the instrument for constituting an inter vivos trust
Unclear whether secret trusts are express trusts or constructive trusts
do declarations of trust of land have to comply with s53(1)(b) formalities?
Court enforced oral trust of land, but issue of s53(1)(b) not raised
Ottaway v Norman
Suggested that half-secret trust of land was not enforceable without written evidence
Re Baillie
Constructive trust would be imposed to compel a secret trustee to hold trust land as had been agreed with the testator (obiter)
Kasperbauer v Griffith
