trust

Question 1

definiton of trust

3 persons

Answer 1

A legal transaction whereby the owner of real and personal property (settlor) transfers legal title to another party called the trustee with instruction or legal obligations to hold for the benefit of the beneficiary(ies).
Trust has rights like ownership but qua ownership.

1. settlor; Owner of the property.
2. trustee;
   These are the individuals designated as the responsible party for controlling the assets in the trust. And depending on the nature of the trust, they can have a lot of power over what is done with the assets.
   Trustees have a fiduciary duty to manage the assets in the estate for the benefit of the beneficiaries. And they are at the risk of being personally liable for failing to do so.
   For example, they could decide to loan artwork in the trust out to museums. Or they could rent out real estate. Their actions need to show that they are attempting to grow the assets and acting in the best interest of the trust.
3. beneficiaries. A beneficiary is the person, people, or organizations who benefit from the assets held in the trust. The trust is primarily for his/her/their benefit. It is managed by the trustee for that purpose and based on an elevated standard of care called “fiduciary duty”.

Question 2

TYPES OF TRUSTS: 3 of them

Answer 2

A. Expressed private trust
B. Resulting trust
C. Constructive trust

Question 3

A. Expressed private trust

created 2 ways

2 elements (1…3////1)

Answer 3

Created 2 ways:

a. Inter vivos: between 2 people living
b. Testamentary: legacy under a gift. After the death of a party, takes legal force.

1. 3 certainties
   a. Certainty of subject matter: trust instrument must be clear as to what resources under it are.
   b. Certainty of words: specific phrases have to be used to identify an expressed trust. They must engender an obligation on the part of the trustee to hold the subject matter on behalf of the beneficiary.
   Law of trust: precatory (cannot merely requesting the performance)
   c. Certainty of objects: the instrument must be capable of clearly identifying all the beneficiaries. What if it’s a class of persons?
   The rule of COO does not disqualify a class of persons or convert to a charitable public trust. Therefore, questions are can the court determine who is/not part of the class? Lack of any these certainties.
   If there is no COO, the particular trust will fall but the grantee will be compelled to hold the property on trust for the settlor or his heirs.
2. Proper constitution: The instrument must the instrument to the trustee as legal owner not beneficial owner.
   The trustee does not have free reign on how they deal with the property.
   What are the consequences of failure to meet the formalities? – in common law it acts as a vitiating factor. Equity on the other hand is not obsessed with formalities. Therefore, for trust (to ensures interests of the parties are curbed; resulting trust.
   If all the terms have been completely defined by the settlor and the property has been conveyed to the trustees, the trust is executed. If some further document is necessary to convey the property to the trustees, the trust is executory. A completely constituted trust will be enforced whether it is executed or executory; the importance is the transfer even if a formalitu has not been met.
   Revocation of the trust is impossible once it has been completely constituted, unless these 3 are present;
3. The settlor expressly reserved the power to revoke
4. The trust was procured by fraud
5. The trust was created by mistake

Question 4

B. Resulting trust

arises in 4 ways

Answer 4

The court infers that the settlor intended to create a trust in favor of himself or of his heirs or nominees, and the benefit results to the donor.
A resulting trust arises in 4 situations:
1. Failure to exhaust beneficial interest
2. Failure of trust. If a vests property in b as trustees for an object, which fails, for example because the beneficiary is dead, B will hold the property as trustee for A or his heirs.
3. Purchase in the name of another generally the rule in trust and property is that the other person is presumes a resulting trust since equity is cynical!!! —— Distinguish from presumption of advancement (if you do what something in the name of another who is related to you, then law infers that you intended to give it away/part with it (the gift) absolutely. Thus, no resulting trust here- in succession law)

Question 5

C. Constructive trust

6 types of them

Answer 5

A constructive trust is one which arises when a stranger to a trust already consisted of, is held by the court to be bound in good faith and in conscience by the trust in consequence of his conduct and behavior. It is a trust to be made out by circumstances.
Imposed by the court. no formal established of a trust relationship, purely from circumstances.

1. Vendor’s lien
2. Purchaser’s lien
3. Trustee profiting from his trust.
4. Chargee’s power of sale
5. Transfer of trust property
6. Fraudulent conveyance of property

Question 6

GISSING V GISSING (4 JUDGES)

Answer 6

It’s a common intention constructive trust case, that has elements that interest because of the activity that was undertaken by the married couple in the case.

LORD RAID: law cannot devise arrangements to which parties did not make. therefore, intention comes from the facts.
but it does not refuse imputation of intention if the law allows for it.

VISCOUNT DILHOURNE: the test of intention is through evidence such as documentary. lack of it, no constructive trust.

LORD MORRIS: the court cannot ascribe intention which the parties did not have. it cannot therefore, affec ownership and any attemptto alter ownership must be found in the statute.

LORD PEARSON:
a prima facie presumption of intention that is rebuttable. contribution of substantial amount towards purchase. this to be infeered from the conduct and surrounding circumstances. substantial contribution allows indirect contribution.

LORD DIPLOCK:
Agrees with DILHOURNE ON evidence to impute constructive trust.
evidence must show that it created an agreement in the way that the party is to act. He outlines that a common intention constructive trust is something that can give interest to a spouse in the join matrimonial home other than using the statutes that the legislator provided for married couples; trust interposing in to married relationship to allow a finding of a beneficial interest and then he analyses the facts of the case and holds that violets activities and indeed ramons were not sufficient to infer a common intention constructive trust so to give her a beneficial interest. Same holding as lower courts.

1. inference rather than imputation
   that a reasonable person would have formed at the time. thus, claimant conducts such as contribution. therefore, a court attributes a non-existent trust to the parties.
2. inference from conduct and the presumption of resulting trust. However, i think is problematic as people’s conduct is made for various reasons.
   His view on common intention seems to involve a distortion of the presumption of a resulting trust.