the creation of trusts constitution

Question 1

what are the four criteria’s that need to meet in order to have a private trust

Answer 1

1) formalities
2) constitution
3) three certainties
4) not contrary to public policy/ perpetuity

Question 2

Situtations where formailties are required

Answer 2

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

Question 3

What does it mean when a trust is constituted

Answer 3

when legal title to the trust property is transferred to the trustee(s)
CA - milroy v Lord (1862)

Question 4

examples on how a trust can be constituted

Answer 4

1) consitituon of trusts created by a will
2) consitution of trusts made my inter vivos

Question 5

what is the case for consitituon of trusts made inter vivos

Answer 5

CA - milroy v Lord - the settlor of the property must make sure that trustee obtains the equitable interest can do this in 3 ways

Question 6

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?

Answer 6

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

Question 7

therefore based on milroy v lord what are the 2 ways to constitutied a inter viovs trust?

Answer 7

1) transfer
2) declaration
you cant do both “equity will not perfect an imperfect gift” CA - jones v lock (1865)

Question 8

what is the rule for trusts constituted by declaration

Answer 8

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

Question 9

what are the six different types of property that can be constituted transfer

Answer 9

1) money
2) chattels
3) land
4) shares
5) chose in action
6) non assignable property

Question 10

how is money transferred

Answer 10

1) intention
2) identify the property
3) some act to show intent to transfer

Question 11

what are chattles

Answer 11

personal belongings

Question 12

how are chattles transferred

Answer 12

1) deed
2) delivery and intention
CA - Re Cole and Jaffa v Taylor Gallery LTD

Question 13

how is land transferred

Answer 13

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

Question 14

what are shares

Answer 14

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

Question 15

how are shares transferred

Answer 15

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

Question 16

what are the 3 key cases to transfer shares in equity

Answer 16

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

Question 17

what are choses in action

Answer 17

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

Question 18

examples of chose in actions

Answer 18

debts
shares
beneficaries interest under a trust
the right to enforce a contract

Question 19

how is chose in action transferred in the legal assignment?

Answer 19

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

Question 20

chose in action transferred in equitable assignment?

Answer 20

CA - phelps v Spon - Smith
1) intention to transfer
2) identify chose in action
3) act by assignor to show intention

Question 21

examples of Non assignable property

Answer 21

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

Question 22

what happens if a trust is incomplete

Answer 22

Generally “equity will not perfect and imperfect gift”

Question 23

what is the rule for the expection for a incomplete trust

Answer 23

CA - Rule in Strong v Bird

1. The intention to make the gift to the donee must have continued until the T’s death
2. The donee must be appointed as executor

other CA - Re Stewart and Re Ralli’s

Question 24

what does it mean by consideration in a trust?

Answer 24

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

Question 25

what is the CA for consideration?

Answer 25

Re Ellenborough [1903] 1 Ch 697