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UNI > Trusts > Flashcards

Trusts Flashcards

1
Q

formalities for a trust of realty

A

a contract to create a trust of land must comply with LP(MP)A 1989 s2- in writing and signed by both parties

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2
Q

formalities for testamentary trust

A

will must be valid- wills act s9
- in writing
- signed by testator or someone else in his presence,
- by signing they intended to give effect to the will,
- must be acknowledged by 2 witnesses present at the same time, those witnesses sign it

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3
Q

disposition of existing equitable interest formalities

A

must comply with s53(1)(c) LPA 1925- in writing, signed, stamp duty paid

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4
Q

what constitutes a disposition of an equitable interest

A

assignment (one person transfers their equitable interest to another in writing) or instruction to trustees to hold the equitable interest for another- must comply with 53(1)(c)

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5
Q

conditions for strong v bird to apply

A

donor must be shown to have the intention to make an inter vivos gift, must be continuing intention right up to date of death– only applies in a situation where the only thing missing is transfer of legal title

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6
Q

knight v knight

A

3 certainties- intention, subject, object

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7
Q

how are trustees appointed for an inter vivos trust

A

either expressly or by declaring the trusts and transferring the property to the trustees- may be done by deed or multiple documents

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8
Q

how are trustees appointed for testamentary trusts

A

executors chosen to administer the estate may be described as executors and trustees, if they are just executors then they will become trustees once they have completed the administration of the estate

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9
Q

number of trustees for land

A

no more than 4 TA 1925, at least 2 to sell land to stop overreaching

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10
Q

circs for replacement of a trustee

A
  • death
  • trustee remains out of the country for more than a year
  • trustee wants to be discharged
  • trustee is unfit/incapable of acting
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11
Q

4 steps a trustee must take on appointment, failure to do so may make them liable for a breach of trust

A
  • find out the terms of the trust
  • inspect the trust instrument and other relevant documents
  • ensure that the trust property is vested in the joint names of all trustees
  • make inquiries if suspicious of past breaches of trust
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12
Q

where to find authority for authorised investments

A
  • trust instrument
  • s3-5 of TA 2000
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13
Q

power of maintenance and advancement where are they stated and what are they

A
  • trust instrument
  • s31 maintenance- getting income before entitled
    -s32 advancement- getting capital before entitled
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14
Q

problem question maintenance

A
  • do the trustees have power to maintain at all, either under trust instrument or under s31
  • is the proposal for the beneficiarys maintenance, education or benefit?
  • how much income is available?
  • are there any past accumulations to make up for any shortfall?
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15
Q

provisos for the power of advancement

A
  • the written consent of any person entitled to a prior interest is required
  • a beneficiary cannot be advanced more than their presumptive share
  • amounts advanced must be brought into account when the beneficiary becomes entitled to the capital
  • all of these can be removed or limited in the trust instrument to facilitate advancements
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15
Q

provisos for the power of advancement

A
  • the written consent of any person entitled to a prior interest is required
  • a beneficiary cannot be advanced more than their presumptive share
  • amounts advanced must be brought into account when the beneficiary becomes entitled to the capital
  • all of these can be removed or limited in the trust instrument to facilitate advancements
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16
Q

advantages enjoyed by charities

A
  • tax benefits
  • outside of the scope of the rule against perpetuities- as long as its a gift from one charity to another
  • dont need a specific beneficiary
  • less restrictive certainty requirements
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16
Q

advantages enjoyed by charities

A
  • tax benefits
  • outside of the scope of the rule against perpetuities- as long as its a gift from one charity to another
  • dont need a specific beneficiary
  • less restrictive certainty requirements
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17
Q

charities act 2011

A
  • statutory definition of charity- now 12 specific purposes and a general catch all category
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18
Q

definition of charity

A
  • s1(1)
    an institution which is
  • established for charitable purposes only
  • is subject to the High Court in the exercise of its jurisdiction with respect to charities
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19
Q

public benefit

A
  • must be beneficial
  • to a sufficient section of the public or the public generally
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20
Q

a contract to create a trust of land must comply with LP(MP)A 1989 s2- in writing and signed by both parties

A

formalities for a trust of realty

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21
Q

will must be valid- wills act s9- in writing, signed by testator or someone else in his presence, by signing they intended to give effect to the will, must be acknowledged by 2 witnesses present at the same time, those witnesses sign it

A

formalities for testamentary trust

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22
Q

must comply with s53(1)(c) LPA 1925- in writing, signed, stamp duty paid

A

disposition of existing equitable interest formalities

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23
Q

assignment (one person transfers their equitable interest to another in writing) or instruction to trustees to hold the equitable interest for another- must comply with 53(1)(c)

A

what constitutes a disposition of an equitable interest

24
Q

3 certainties- intention, subject, object

A

knight v knight

25
Q

either expressly or by declaring the trusts and transferring the property to the trustees- may be done by deed or multiple documents

A

how are trustees appointed for an inter vivos trust

26
Q

executors chosen to administer the estate may be described as executors and trustees, if they are just executors then they will become trustees once they have completed the administration of the estate

A

how are trustees appointed for testamentary trusts

27
Q

no more than 4 TA 1925, at least 2 to sell land to stop overreaching

A

number of trustees for land

28
Q
  • death
  • trustee remains out of the country for more than a year
  • trustee wants to be discharged
  • trustee is unfit/incapable of acting
A

circs for replacement of a trustee

29
Q
  • find out the terms of the trust
  • inspect the trust instrument and other relevant documents
  • ensure that the trust property is vested in the joint names of all trustees
  • make inquiries if suspicious of past breaches of trust
A

4 steps a trustee must take on appointment, failure to do so may make them liable for a breach of trust

30
Q
  • trust instrument
  • s3-5 of TA 2000
A

where to find authority for authorised investments

31
Q
  • trust instrument
  • s31 maintenance- getting income before entitled
    -s32 advancement- getting capital before entitled
A

power of maintenance and advancement where are they stated and what are they

32
Q
  • do the trustees have power to maintain at all, either under trust instrument or under s31
  • is the proposal for the beneficiarys maintenance, education or benefit?
  • how much income is available?
  • are there any past accumulations to make up for any shortfall?
A

problem question

33
Q
  • the written consent of any person entitled to a prior interest is required
  • a beneficiary cannot be advanced more than their presumptive share
  • amounts advanced must be brought into account when the beneficiary becomes entitled to the capital
  • all of these can be removed or limited in the trust instrument to facilitate advancements
A

provisos for the power of advancement

34
Q
  • the written consent of any person entitled to a prior interest is required
  • a beneficiary cannot be advanced more than their presumptive share
  • amounts advanced must be brought into account when the beneficiary becomes entitled to the capital
  • all of these can be removed or limited in the trust instrument to facilitate advancements
A

provisos for the power of advancement

35
Q
  • tax benefits
  • outside of the scope of the rule against perpetuities- as long as its a gift from one charity to another
  • dont need a specific beneficiary
  • less restrictive certainty requirements
A

advantages enjoyed by charities

36
Q
  • tax benefits
  • outside of the scope of the rule against perpetuities- as long as its a gift from one charity to another
  • dont need a specific beneficiary
  • less restrictive certainty requirements
A

advantages enjoyed by charities

37
Q
  • statutory definition of charity- now 12 specific purposes and a general catch all category
A

charities act 2011

38
Q
  • s1(1)
    an institution which is
  • established for charitable purposes only
  • is subject to the High Court in the exercise of its jurisdiction with respect to charities
A

definition of charity

39
Q
  • must be beneficial
  • to a sufficient section of the public or the public generally
A

public benefit

40
Q

not charitable if it is attempting to influence gov policy

A

national anti-vivisection Society v irc

41
Q

situations which may give rise to a resulting trust

A
  • failure
  • purchase money resulting trusts- eg apparent gifts (equity presumes a gift was intended eg parent to child)
42
Q

4 ways a failure to dispose a beneficial interest creates a resulting trust

A
  • failure of a trust- re diplock
  • no trusts declared- vandervell v irc
  • incomplete disposal of the beneficial interest- abbot fund and Andrews trust
  • failure of a specific purpose- Barclays v quistclose
43
Q

how purchase money resulting trusts are made

A
  • purchase in the name of another
  • purchase by several in the name of one
  • presumption of advancement (POA)
44
Q

POA

A
  • works in opposition to and is stronger than the presumption of a resulting trust
  • where certain relationships exist a voluntary transfer is presumed to be by way of a gift
    husband and wife- Pettitt v pettitt- wife bought a house, husband made alterations etc- doesnt give him an equitable interest
    also covers parents transferring to kids
    if there is no POA because the transaction isnt between husband and wife, the presumption is one of resulting trust
  • can rebut POA by contrary evidence of intention- but not if it was based on an illegal purpose- Gascoigne v Gascoigne
45
Q

constructive trusts

A
  • one that comes into being without the need to comply with formal requirements- comes into being at the time of the relevant conduct, is based on wrongdoing and is independent of the intention of the constructive trustee
  • fiduciaries taking unauthorised profits- keech v Sandford, boardman v Phipps
46
Q

statutory implied trusts- proprietary estoppel

A

3 elements claimant has to prove
- representation
- reliance
- detriment

47
Q

retirement of trustees

A
  • no automatic right to retire
  • can be express
  • or TA s39 gives conditions where you can
  • beneficiaries have to allow it and put it in writing
48
Q

trustees duties- use to decide if there has been a breach

A
  • to invest the fund
  • recover debts
  • distribute the trust property in accordance with the terms of the trust instrument
  • to protect the trust assets
49
Q

is the trustee responsible for the breach?

A
  • all have a duty to act
  • the fact that one is a solicitor doesnt reduce the obligations of other trustees unless they are controlling- Head v Gould
  • a trustee cant be held liable for breaches before he took up appointment or for breaches after retirement unless he retired to facilitate it
50
Q

ways a trustee can claim relief from liability

A
  • express provisions in the trust instrument- armitage v nurse
  • statutory relief may be granted by the courts
  • where a beneficiary is involved- re Somerset
  • beneficiaries can release them from liability
  • retiring trustee can seek indemnity from co trustees
  • liability is joint and several if more than one is found liable
51
Q

limitation period for breach

A
  • 6 years from the date of the breach
  • or 6 years after their interest falls into possession
52
Q

fact pattern q for tracing

A
  1. there will be an initial fiduciary relationship to found the equitable proprietary claim by beneficiaries
  2. then consider whether the assets are mixed or unmixed and the rules- and the identity of the recipient
  3. consider that the result needs to be equitable- defences
53
Q

proprietary rights- and advantages

A
  • right in an asset eg a car that is good against third parties

advantages
- the success of a proprietary claim doesnt depend on the solvency of D
- a prop right is advantageous for beneficiaries- they could claim the asset even if it has inc in value– they may be able to claim more interest (get it from the date of receipt of the property- personal- only get interest from the date when liability is settled)

54
Q

when can’t you trace in equity

A
  • not possible to trace property to a bona fide purchaser for value with no notice (equitys darling)
  • not possible if given to an innocent volunteer
  • re diplock
55
Q

mixed fund

A

re hallet- if a trustee spends trust money and their own money it is presumed they spent their own money first to keep them honest
but
re oatway- if trustee is then bankrupt and cant pay back the beneficiaries it flips so money spent on an asset is presumed to belong to beneficiaries so they can get some money back

56
Q

what is dishonesty?

A

1995 royal Brunei airlines v tan- based upon acc knowledge was Ds conduct dishonest according to the standards of ordinary honest people?
2002 - Twinsectra v Yardley
- Dishonest to the standards of ordinary honest people and did they appreciate that?- combined
2005- Barlow Clowes v Eurotrust
- Go back to royal brunei airlines v Tan
2017- Ivey v Genting Casinos
- Actual state of d’s knowledge/belief and is that dishonest by the standard of ordinary honest people
2019-Group 7 v Notable
- was the defendants conduct honest or dishonest according to the standards of ordinary honest people?

57
Q

5 states of knowledge- baden

A
  • actual knowledge
  • wilfully shutting ones eyes to the obvious
  • wilfully and recklessly failing to make such inquiries as a reasonable and honest man would make
  • knowledge of circs which would indicate the facts to an honest and reasonable man
  • knowledge of circs which would put an honest and reasonable man on inquiry
58
Q

remedies for stranger liability

A

dishonest assistant- personal only as they dont have property
knowing recipient- prop or personal but need a level of knowledge for personal
can use tracing too

UNI (19 decks)

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