Trust 4 - Three Certainties Flashcards
What are the 3 certainties?
- Intention
- Subject Matter
- Objects
What is certainty to intention?
Intention to create a trust
- ‘desire’ that someone should do something not enough
- Segregation of assets = key indicator
How is intention guaged?
- objectively
- irrelevant if they don’t know what a trust is
- irrelevant if they didn’t intend to create a trust
Is the use of the word ‘trust determinative’ when considering intention?
No
its the rights and obligations that matter
What are the key cases on intention?
- collecting rent on behalf of beneficiary into separate bank account - trust
- Bingo winnings “as much yours as mine” & convo with bank manager & way account used - trust
- customers money paid into separate account to protect from insolvency - trust
- ownership of supplied materials was a charge rather than a trust
What is certainty of subject matter?
Must identify
- trust property
AND
- nature/extent of beneficial entitlement
When could certainty of subject matter fail from description?
Where property can’t be ascertained from description e.g. ‘bulk’ or ‘net assets’
NOT for shares though, you can just say a number but for everything else, must identify specific objects
When can you give away a percentage or number of a ‘bulk’
Only if its intangible and fungible - basically shares
Anything else you’d need to identify the specific items within the fungible whole.
Is ‘reasonable income’ sufficiently certain?
Yes
What are the cases for certainty of subject matter?
- wine merchant held wine on trust but did not separate - failed
- trust over 50 of 950 shares - didn’t fail as shares are identical
What is certainty of objects for fixed trusts?
if fails for some Bs won’t fail for all.
Looking for a complete list of Bs:
- conceptual (what the class is)
- evidential certainty (does x fall within that class) .
What are the tests for discretionary trusts?
- is/is not test - is ‘this person’ in the list or not (even if can’t draw up a complete list)
- conceptual (what the class is)
- evidential certainty (does x fall within that class) .
What if the class of beneficiaries of a discretionary trust is too wide?
It will fail e.g. occupant of England as trustees have to consider the range of beneficiaries even if they don’t consider them individually
What if the class of beneficiaries of a power of appointment is too wide?
it won’t fail as there is no duty of the fiduciary to sample the whole of the population of beneficiaries.
What happens if a gift to someone whilst the donor is alive fails?
The Donee holds the property on trust for the Donor