the creation of trusts constitution Flashcards
what are the four criteria’s that need to meet in order to have a private trust
1) formalities
2) constitution
3) three certainties
4) not contrary to public policy/ perpetuity
Situtations where formailties are required
1) inter vivos trust of land- it required the formailties S.2 of the law of property act 1989
2) wills - s9 will act 1837
3) transferring an existing interest under a trust - s53(1)(c) law of property act 1925 - for land need formailties .
CA -Grey v IRC [1960] - where there is no writing there is no dispostion
another CA - Vanderwell v IRC [1967] - rule if legal and equitable title are being transfered = no need for a seperate dispositon for the equitable interest
What does it mean when a trust is constituted
when legal title to the trust property is transferred to the trustee(s)
CA - milroy v Lord (1862)
examples on how a trust can be constituted
1) consitituon of trusts created by a will
2) consitution of trusts made my inter vivos
what is the case for consitituon of trusts made inter vivos
CA - milroy v Lord - the settlor of the property must make sure that trustee obtains the equitable interest can do this in 3 ways
in the case of milroy v lord - what are the 3 ways that the owner of the property can pass the equitable interest to someone else?
1) transfer his entire ownership (legal and equitable) to another person - making a complete gift - THIS DOES NOT INVLOVE A TRUST
2) transfer the legal title to another person to hold on trust
3) retain legal ownership but declares the property vested in him to be held on trust - changes from owner - trustee
therefore based on milroy v lord what are the 2 ways to constitutied a inter viovs trust?
1) transfer
2) declaration
you cant do both “equity will not perfect an imperfect gift” CA - jones v lock (1865)
what is the rule for trusts constituted by declaration
1) the settlor must make irrevocable declaration of a trust - no returning to absolute ownership
2) intention must be in writing if the trust is for a land- s53(1)(b) LPA
anything else can be oral
what are the six different types of property that can be constituted transfer
1) money
2) chattels
3) land
4) shares
5) chose in action
6) non assignable property
how is money transferred
1) intention
2) identify the property
3) some act to show intent to transfer
what are chattles
personal belongings
how are chattles transferred
1) deed
2) delivery and intention
CA - Re Cole and Jaffa v Taylor Gallery LTD
how is land transferred
1) s52 LPA 1925 - requires a deed
2) s7 Land Registration Act 2002 - must register the transfer of registered land at the land registry
CA - Mascall v Mascall
what are shares
intangible property
companies owned by shareholders who have shares in the property
share are valuable as the holder owns a percentage of company
if the company os doing well share holders get dividends
how are shares transferred
1) complete a stock transfer form
2) give the stock transfer form and the share certificate to the recipient
3) the recipient will send them to the company
4) legal title to the shares is transferred when the company has updated its register of shareholders
what are the 3 key cases to transfer shares in equity
1) Milroy v Lord - have to do everything necessary
2) Re Rose - settlor must have done everything within his power - re rose principle
3) Pennington v Waine - where it would be unconscionable to go back on the transfer
what are choses in action
personal rights of property that can only be enforced by taking action NOT by possession. these are intangible nature which are recognised in law and equity as being property
examples of chose in actions
debts
shares
beneficaries interest under a trust
the right to enforce a contract
how is chose in action transferred in the legal assignment?
1) absoulte - the entire interest must be transferred
2) in writing
3) notice in writing given to the debtor CA - warner Bros v Rollgreen suggest that later notice given by the assignee would be suffient
4) must be debt/ other legal thing in action
chose in action transferred in equitable assignment?
CA - phelps v Spon - Smith
1) intention to transfer
2) identify chose in action
3) act by assignor to show intention
examples of Non assignable property
1) contracts speifcally decalred to be non assignable
2) mere rights of litigation - for example if there as been a breach
3) expectancies
4) public policy makers
what happens if a trust is incomplete
Generally “equity will not perfect and imperfect gift”
what is the rule for the expection for a incomplete trust
CA - Rule in Strong v Bird
- The intention to make the gift to the donee must have continued until the T’s death
- The donee must be appointed as executor
other CA - Re Stewart and Re Ralli’s
what does it mean by consideration in a trust?
Most beneficiaries are volunteers as they have not given consideration.
if the trust is not constituted they have no enforceable rights as “equity will not assist a volunteer”.
This is often a problem where a settlor has promised to put property on trust but fails to do so
