trust intro Flashcards
basic def of trust
one party ‘trustee’ owns certain property which he must hold and admin on behalf of another party, a beneficiary on order to accomplish another purpose. the PURPOSE is defined by a party called a TRUSTER.
The essence of a trust is relationship of a TRUSTEE and the BENEFICIARY= FISUCIARY. Trustee must discharge his duty to admin the property in good faith regardless of his own personal interests for the Behoof of the beneficiary.
the duty qualifies the ownership which the trustee has of the trust property( his title is an ABSOLUTE ONE)
A trust in itself is neither a legal person nor a corp.
modern analysis is that the trustee holds two patriomonies (or estates) private pat and trust pat.
THESE ARE SEPARATE LEGAL ENTITIES.
history of trusts
Scottish trusts are homegrown or roman law.
International dimension to trusts
growing interest in many civil juristictions MALTA TRUSTS AND TRUSTEES ACT 2004 many like spain/ poland wanting to introduce.
Much of the interest is triggered by the Hague Convention on the law of Applicable Trusts and On Their Recognition 1st July 1985.
Hague convention on above has been implemented in the UK through the RECOGNITION OF TRUSTS ACT 1987
EUROPEAN PROJECTS AIMED AT HARMONISING/ UNIFYING TRUST LAW
DRAFT COMMON FRAME OF REFERENCEE, BOOK X
THE PRINCIPLE OF EUROPEAN TRUST LAW
trusts that are NOT trusts
NHS and bodies corp with board of directors
INVESTMENT TRUSTS
WHY create a trust
trust is extremely versitle and flexible legal instrument
- it splits the management of certain assets from the benefit
- it can split the benefit between several beneficiaries over time
- it can be used to postpone a decision about the benefit of the property.
it has the benefit of real subrogation
THE TRUST DOES NOT COME TO AN END WHEN THE TRUSTEE DIES/ IS INCAPAX
trust property is separate from creditors oof the trustee and truster
the trust property is PROTECTED INCASE OF BREACH OF TRUST
s.98 2016 Bankruptcy Scotland act
truster cannot defeat creditors by putting assets into a trust
DM VJM AND THE W TRUSTS LTD
S.18 Family law scot act. TRUSTER CANNOT defeat spouse on DIVORCE.
if about to get divorce and hid assets in trust then s.18 app.
Mr M made a lot of money set up a trust for children and himself but not wife well before divorce. mrs M wanted rights to trust. Held No as INTENTION to DEFRAUD PARTNER WITH TRUST NOT APP. WHEN CREATED TRUST ONLY FRACTION OF HIS WEALTH.
How much property in Scotland is held in trust
Scottish law commission £500 billion.
WHY USE A TRUST
those whose ultimate right to befit is not the same as the person in charge of the trust or set up the trust.
protected from personal creditors of truster and trustees
impose conditions on the trust.
s.2 trusts scot act 1921
any trust constituted by any deed or other writing by private or local act of parliament or by royal charter or by resolution of any corp
wilson and Duncan what is a trust
trust then is a legal relationship in which property is vested in one person a trustee, who is under a fiduciary obl. to apply the property to some extent to the benefit of another person, the ben. the obli being a qual of the trustees proprietary right and preferable to all claims of TRUSTEE OR HIS CRED
Trust as a legal relationship
beneficiary has rights against trustee trustee = obl to ben.
truster sets up purpose of trust
when are trusts used
public context: trusts set up to benefit wider public, property of charities and other bodies
private context; domestic and commercial domestic -to hold property for incapax persons - to admin a perosns estate -to protect wealth down the gen -to provide a more flexible way of living commercial protection of assets from insolvency management of pension hold property for incorp associations sports club porperty
classification of trust
inter vivos and mortis causa
inter vivos = takes affect alive
mortis causa- takes affect dead
