Trust Law- Purposes of a trust Flashcards
what are the limits on the purposes for which trusts can be set up?
a) Purposes uncertain because of vagueness or lack of specification
b) purposes contrary to morality or public policy
c) illegal purposes
how does uncertainty limit a trust?
because it cannot be determined what a truster wishes to be done with trust property the trust may be void for uncertainty. This uncertainty may arise of vagueness or wideness.
how does the court deal with vagueness?
the exact meaning of the words will be construed in the context of the whole deed and this can differ from the normal everyday meaning. Also note some words have been giving statutory definitions. Such as in the LAW REFORM ACT 1966 children was defined to include illegitimate and step children
what happens if there is vagueness of ambiguity?
this will render a trust purpose void only if it is of such a degree that the trust purposes cannot be determined from the words. Seen in HARDIE V MORISON (1899)
what happens if a trust has an overlywide purpose?
trust purposes must be stated with sufficient certainity and precision and not so widely that they confer on the trustees such a wide discretion that it is the the trustees’ purposes which are being carried out and not that of the truster
what does it mean by a truster entitling trustees to select?
a truster can confer powers upon his trustees entitling them to ‘select’ within a particular class. This means that the truster must appoint trustees for the trust to be valid. He cannot simply leave the discretion to be exercised by anyone who acquires a title to administer the trust.
what is a particular difficulty where the truster uses vague forms of words?
depends on which word it is.
‘charitable purposes’ is valid (Angus exx.v Batchans trs 1949) and so is ‘educational purposes
‘public purposes’ (Blair v DUncan (1901) and ‘religious purposes’ (Rintoul’s Trs v Rintoul 1949) are not valid.
what happens if a trust is contrary to morality?
a trust will be void if it held by the court to be immoral or otherwise stated contra bonos mores (Bowman v Secular Society Limited (1917))
what if a trust is contrary to public policy?
trust purposes cannot be contrary to public policy. Extravagent and wasteful (Sutherland’s trs v verschoyle and ors 1968). Funeral arrangements, tombstones and memorials McCaig v Glasgow University 1907
what if a trust has an illegal purpose?
a trust purpose must not be illegal
- no breach of the common law such as would be the case if the trust benefited an illegal organisation
- purposes rendered incompetent by law
