Trusts :

Question 1

What are trusts used for ?

Answer 1

Tax savings (as a gift)
Hold land for minors
Hold funds for non/charitable purposes
Hold pensions funds for employees
Enable 2 or more people to own land
Decides disputes to properly by constructive or resulting trusts

Question 2

categories of trust :

Answer 2

Express trust =
Charitable (public)
Private (fixed interest & discretionary)

Trusts imposed by law =
Constructive
Resulting

Question 3

types of trusts

Answer 3

Express : secret trust & constructive trus
Secret : the settler may not want others to know about the particular beneficiary

Purpose trusts & unincorporated association : no named person who can claim the beneficiary right to the trusts
unincorporated trust = a company or sport club

Charitable : a specific purpose must be fulfilled
The purpose needs to fit into one of the 4 categories recognised as exclusively charitable :
trust for the relief of poverty
trust for the advanacement of religion
trust for the advanacement of education
trust for other purposes beneficial to the community

Resulting : A creation of an implied trust by operation of law, whereas express trust is created by the intention of the disposer. Beneficiary interests results to or jumps back to the settlor who created the trust

Constructive : Arises by operation of law, does look at the intention of the parties, constructive trust can deal with issues surrounding cohabitation without marriage

Question 4

consequence of beneficiary’s property beneficial/equitable interests :

Answer 4

Trust property is not available to the trustees personal creditors

The beneficiary can transfer their beneficial interest (Brandon v Robinson 1811)

Beneficiaries can collectively bring the trust to an end (Saunders v Vautier 1841)

Question 5

Remedies against trustees

Answer 5

Personal remedies:
account
equitable compensation
injunctions

Proprietary remedies:
constructive trusts

Question 6

remedies against 3rd parties :

Answer 6

Personal remedies :
account got profit
equitable compensation

Proprietary remedies :
tracing and compensation

Question 7

Westdeutsche 1996 ‘basis principles’ of trust law :

Answer 7

Equity acts on conscience of legal owner

Legal owner must be aware of factors said to affect conscience

Must be identifiable trust property

Beneficiary has proprietary interest in the trust property enforceable in equity against subsequent holders of the property

Question 8

Formalities and Constiution

Answer 8

Formalities :
Land ~ s.53 Land of Property Act 1925
Testamentary trust : s.9 Wills Act 1837
~ formalities can be created informal
~ formalities are no required for other trusts

Constitution :
Transfer of property to trustee
Requires certain formalities (registration of shares)

Question 9

Three Certainties :

Answer 9

Knight v Knight 1840
~ certainty of intention to create a trust
equity will not perfect an imperfect gift
(Jones v Lock 1875)
expressed or implied
(Paul 1977)

~ certainty of subject matter (property)
mixed/bulk : (Lehmann Beothers 2011)
property must be identifiable

~ certainty of objects (beneficiaries/charitable purpose)
RE Astor’s Settlement 1952
certainty of objects :
• fixed trusts : complete list of beneficiaries
IRC v Broadway cottages 1955
• discretionary trusts : any given postulant / ‘is or is not’ test
McPhail v Doulton 1970

Question 10

Re Astors Settlement 1952

Answer 10

must be certain of objects
beneficiary principle : trust must be for the person not purpose
rationale :
enforcement : who will enforce trust if there are no person (owners) who has sufficient interest in enforcing the trusts
court if control : courts must be able to review administration and to decree performance of the trust