Trust 5 Formalities & Constitution Flashcards

1
Q

What happens with a discretionary trust and a power of appointment where the class of objects is too wide?

A

Discretionary = void
Power = remains valid

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2
Q

What formalities are there to create an express trust of land?

A

Manifested and proved
- By some writing (evidence of intention and its terms)
- Signed by some person able to declare such trust (or by will)

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3
Q

What if there is no written evidence?

A

The trust is unenforceable NOT void. This means that if, later, the transfer is evidenced in writing, the beneficiaries will be able to enforce their rights going back to the original date of creation of the trust.

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4
Q

What are the cases on oral agreements of land?

A
  • A sold to B on the oral agreement that B would hold it on trust - held constructive trust created as would otherwise be fraud.
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5
Q

What formalities are there to create an express trust (not of land)?

A

No real formalities, just must satisfy requirements e.g. certainties

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6
Q

What are consequences of not complying with formalities to create a trust in land?

A

Renders the trust unenforceable (not void): beneficiary can’t enforce rights until requirements are satisfied & when they are, can enforce rights in respect of period before

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7
Q

What happens if formalities to create a trust are never satisfied?

A
  • Trust remains unenforceable subject to anything rendering it unconscionable for settlor to deny the trust
  • For transfer on trust, if settlor also makes no attempt to constitute, will be unenforceable and void for lack of constitution subject to unconscionability
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8
Q

What is constitution?

A

Transfer of legal title

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9
Q

How is constitution achieved for cheques?

A
  • Cheques: endorsing cheque by signing on back
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10
Q

How is constitution achieved for registered land

A
  • Registered Land: valid deed, registration
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11
Q

How is constitution achieved for shares,

A
  • Shares: sign stock transfer form & send to company; title passes when named entered in register
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12
Q

How is constitution achieved for choses in action (debts and money in a bank account),

A
  • Choses in Action: notice in writing to debtor/bank
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13
Q

How is constitution achieved for chattels?

A
  • Chattels: by deed or gift; deliver with evidence of intention
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14
Q

What is effect of constitution?

A

Disposition is irrevocable - settlor ceases to have any legal or beneficial interest in property

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15
Q

When will constitution fail for trust property? And for gifts?

A

Trust: if not vested in trustees
Gift: if legal title hasn’t passed

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16
Q

What is the doctrine of equity will not assist a volunteer?

A

Equity won’t compel a settlor to transfer legal title i.e. won’t perfect an imperfect gift or treat it as a self-declaration of trust if constitution fails

17
Q

What was Milroy v Lord and others

A
  • tried to transfer shares to a trust but didn’t fill in share transfer form. Therefore, gift failed.
  • father put cheque in baby’s hand saying it was for B but didn’t endorse cheque - no gift and no trust as intention was gift
18
Q

What are the exceptions to principle of equity won’t assist a volunteer?

A
  1. Re Rose
  2. Fortuitous Vesting
  3. DMC
19
Q

What is the principle in Re Rose?

A

Transfer of shares/land effective in equity once transferor has done everything in their power to effect transfer

  • Correct method of transfer used
  • Transferor did everything w/in their power
  • Documentation in hands of person capable of effecting transfer/transferor has put matter beyond their own control
20
Q

Would sending docs to your solls for them to deal with be within Re Rose?

A

No - Sending it to solicitor is not doing everything as solicitor agent of transferor

21
Q

Would sending docs to the donee for them to deal with be within Re Rose?

A

Yes

22
Q

What is the principle of unconscionability in relation to Re Rose?

A

Might also apply where unconscionable not to do so - proprietary estoppel
1) Assurance (you’ll have the shares Harrold)
2) Reliance (Harold became a director)
3) Detriment (Harold took on duties as director)
Must be unconscionable to go back on assurance

23
Q

What is fortuitous vesting?
(Strong v Bird)

A

The intended recipient of a gift is also the PR of transferor’s estate, so gift is perfected on death

  • Intention to make immediate gift
  • Intention must continue until donor’s death
  • Intended donee becomes executor of donor’s estate

Must relate to existing property, not future

24
Q

What case covers immediate gift for Strong v Bird?

A
  • A promised car to B but it needed to be repaired
  • A then lent car to C

Gift from A to B not immediate

25
Q

What case covers continuing intention for Strong v Bird?

A
  • Mother promised daughter house
  • M gave D a cheque instead
  • D became executor
  • No gift as intention changed when cheque was given
26
Q

What is a DMC?

A

Gift made in contemplation of death
Gift:
- made in contemplation of imminent death
- conditional on death
- Delivery of property (not necessarily transfer of legal title, just part with control - can be constructive e.g. keys to a locked box containing deeds)

Note: unlike fortuitous vesting DMC does not require the gift to be immediate, just IF dies.

27
Q

What is the case for DMC

A
  • keys to box containing deeds to house = enough

NOTE (keys to house would not be enough)

28
Q

To make a trust of land, does the declaration and writing have to be contemporaneous?

A

No, just need evidenced in writing.

29
Q

What happens if there is no evidence in writing of a trust of land

A

The trust is unenforceable but not void. This means the beneficiary can’t enforce their rights unless and until the trust is evidenced in writing.

30
Q

If a trust in land is later recognised in writing, can the beneficiary sue in respect of the time between declaration and the written evidence of that declaration?

A

Yes. The declaration acts retroactively.

31
Q

Does a trust in land always need to be evidenced in writing?

A

No, only express trusts need do so. Resulting and constructive trusts do not need to be evidenced in writing

32
Q

Does an imperfect gift or trust create a valid trust

A

No,
- an imperfect gift does not make a trust (I.e. not taking a step required to transfer ownership) and
- if title doesn’t move to the trustees then the trust is imperfect and void.