Trust Law- Classifications of Trusts Flashcards
Name the various types a trust may be classified into
- Discretionary trusts
- simple and special trusts
- inter vivos and testamentary trusts
- public and private trusts
- charitable trusts and other trusts
- trusts created voluntarily and those created by legal implication
A trust can fall into a number of these categories
what is a discretionary trust?
In Scots law there is no special category of trusts known as “discretionary trusts” to which different legal rules apply. In relation to virtually all trusts because in relation to trusts the trustees will require to exercise some element of discretion.
what is a simple and special trust?
In a special trust the trust property is held for a special purpose. With a special trust, the purposes of the trust are set out, and the trustee has duties to perform in accordance with the truster’s directions. In a simple trust there is no special trust purpose but merely an obligation to hold the property and to hand it over to the truster or his nominee when called upon to do so.
what is an inter vivos and testamentary trusts?
Inter vivos trusts are set up by trusters whilst they are alive. Testamentary or mortis causa trusts are set up to take effect after the death of the truster.
what is a public and private trust?
Private trusts are for the benefit of individuals and cannot continue indefinitely. Public trusts are for the benefit of the public or a section of the public and can exist indefinitely.
why is it difficult to determine whether a trust is a public trust or private trust?
may be difficult to distinguish between a large group of individuals and a small section of the general public. Glentanar v Scottish industrial musical association 1925
whats a difference between a public and private trust
Because public trusts are for the benefit of at least a section of the public any member of that section of the public who would qualify as a potential beneficiary and, in addition, the Lord Advocate representing the public interest, can bring an action to enforce the provisions of the trust. In private trusts the truster has the right to appoint new trustees in a situation where the old trustees fail such as the death of the last trustee.
what is a charitable trusts?
In English law there is an important class of trusts known as “charitable” trusts which are distinct from “private” trusts. However, in Scotland although many trusts are set up in Scotland to further charitable purposes, this classification as “charitable trusts” does not generally exist in Scots law except in relation to taxation law. (INLAND REVENUE v GLASGOW POLICE ATHLETIC ASSOCIATION 1953, S.C. (H.L.) 13). A charitable trust may become what is known as a “benevolent body” in terms of CHARITIES AND TRUSTEE INVESTMENTS (SCOTLAND) ACT 2005, PART 2. If it does so it is subject to all the relevant regulation.
