the three certainties Flashcards
What must a trust overcome in order to be valid?
the three certainties
what do the rules on certainties apply to?
Private trusts not charities
Express trusts - not implied, resulting or constructive trusts
why do the rules exist?
- the trustees should be able to know the extent of their duties
- the court can determine whether there has been a breach of trust
what are the three certainties?
intention
subject
object
what would the issue be without these three certainties?
a trustee cannot be certain that they hold a property on truest
in Vucicevic v Aleksic [2017] how did HHJ Matthews define certainty of intention?
certainty of intention = that the testator intended to create a trust rather than some other legal arrangement
without intention there is no ..
express trust
how can intention be demonstrated?
- put it in writing
- use the word ‘trust’ - Re Kayford [1975]
- use of imperative and precatory words
- by circumstances/actions - Paul v Constance [1977]
what is certainty of intention?
a certain intention to create a trust
- has a sufficient intention to create a trust been manifested
- precatory words can give rise to a trust but sometimes don’t
what is certainty of subject?
certainty with regard to the assets subject to the trust and the shares which they are to be held by the beneficiaries
what is certainty of object?
certainty with regard to beneficiaries or purposes of the trust
think about who or what the trust has been created for
what are the two forms that lack of certainty of subject matter take?
the property itself may be uncertain - in which case there will be no trust at all
the beneficial entitlement of particular beneficiaries may be uncertain - in which case the trustees will hold the fund on resulting trust for the settlor
when is there different tests for certainty of objects?
depending on which type of trust is being dealt with
what did IRC v Broadway Cottages Trust [1955] conclude about fixed trusts?
you must be able to identify every beneficiary in order to have certainty of objects in terms of fixed trusts
what is the test applied for certainty of objects in terms of fixed trusts?
complete list test
what must you have to have a complete list?
conceptual certainty
evidential certainty
ascertainability - class members must be identifiable
what is a fixed trust?
the amount the trustee is obliged to give to the beneficiary is fixed
they must pay the money to the right people. but they must know exactly who these people are
what is a discretionary trust?
the trustees choose how to divide the trust. it is not fixed by the settlor
the trustees have discretion over how much to give each beneficiary
what is the test used for certainty of objects in terms of discretionary trusts?
individual ascertainability test
what is the individual ascertainability test?
beneficiaries claim to be a beneficiary
must be determined whether they are part of the class that would be a beneficiary or not
objective criteria to be a beneficiary
if they can prove they are in the class, they can be entitled to the beneficiary
in Vucicevic v Aleksic [2017] how did HHJ Matthews define certainty of subject matter?
certainty of subject matter = the property subject to the trust can be ascertained
in Vucicevic v Aleksic [2017] how did HHJ Matthews define certainty of objects?
certainty of objects = the beneficiaries or purposes of the trust are clear
