Settlements And Trusts Flashcards
What is a settlement of land?
A legal arrangement creating successive interests in land to keep it within a family across generations.
What key law replaced settlements with trusts of land?
The Land and Conveyancing Law Reform Act 2009 (LCLRA 2009).
What are the three types of land that became trusts of land under the LCLRA 2009?
- Land held under a settlement
- Land of a minor
- Land held under a trust for sale
What is a strict settlement?
A legal structure where land is granted in a sequence (e.g., to A for life, remainder to B in fee tail).
Name 3 problems with strict settlements.
- Inalienability of land
- Limited income and inability to improve
- Burden of jointures and portions
What reforms addressed these problems?
The Settled Land Acts 1882–1890.
Who is the Tenant for Life under the Settled Land Acts?
The person entitled to possession of the land.
Can the TFL’s powers be restricted by the settlor?
No, statutory powers override settlement terms (S.51 SLA 1882).
What key duty does the TFL owe to future interest holders?
To act with regard to their interests – fiduciary duty (S.53 SLA 1882).
What are 4 key powers of the TFL under the Settled Land Acts?
- Sell land (S.3)
- Lease land (S.6)
- Mortgage for limited purposes (S.18)
- Make improvements using capital money
Can a TFL be compelled to exercise their powers?
No, but improper use can result in liability.
What restriction applies to selling the mansion house?
Consent of trustees is required (S.10, 1890 Act).
What is the role of trustees in the Settled Land Acts?
To oversee TFL actions, hold capital money, and protect future interests.
What is ‘capital money’?
Money from sale/mortgage of land; must be paid to trustees or the court.
What is ‘salvage’?
Court-approved capital expenditure to prevent imminent loss (e.g., Re Lisnavagh Estate).
What does overreaching do?
Transfers equitable interests from land to the capital money received on sale.
What protects purchasers under overreaching?
S.54 SLA 1882 – good faith buyers are not affected by beneficiary claims.
What is the key overreaching section in the 2009 Act?
Section 21.
Name 3 exceptions to overreaching under the 2009 Act.
- Expressly made ‘subject to’ an equitable interest (S.21(3)(b)(i))
- Lack of non-owning spouse’s consent (FHPA 1976)
- Fraud or knowledge of fraud by purchaser
Does registration of an equitable interest prevent overreaching?
Yes, if registered before the conveyance (S.21(3)(b)(iii)).
What triggers a trust of land under the LCLRA 2009?
- Strict settlement
- Express or implied trust
- Land vested in a minor (S.18)
Who holds legal title under a trust of land?
The trustees.
What section gives trustees all ownership powers?
Section 20.
Can trustee powers be limited?
Yes, by the terms of the trust instrument.
What are 4 key duties of trustees?
- No personal profit (unless authorised)
- No delegation of core duties
- Duty to distribute to beneficiaries
- Duty to invest prudently
How many trustees are needed to overreach a strict settlement?
At least two trustees or a trust corporation (S.21(2)(a)).
Who can overreach in other trusts (e.g. bare, resulting)?
A single trustee or legal owner (S.21(2)(b)).
Who can bring a trust dispute under S.22?
Anyone with an interest in the trust (or acting on their behalf).
What factors must the court consider?
- Purpose of the trust
- Interests of minors/incapacitated
- Secured creditors
- Any relevant considerations
