Trusts Flashcards
What is a trust?
A trust is a legal agreement between two parties. The trustee and the beneficary, the trustee has legal ownership of the land but is obligated to use it for the benefit of the beneficiary
What is the trust property
Property held by the trust. Can be land, money etc.
Who is the beneficiary?
The beneficiary is the one who the trust has been created for, they have a legal right to be benefit from the trust property.
Who is the trustee?
The trustee is the one who has been passed legal ownership of the trust property, they have a duty of care/fiduciary duty over the land to ensure it benefits the beneficiary.
What is the trust instrument?
Legal document that establishes the rights of the beneficiary and the fudiciary/powers of the trustee. Essentially the duty they owe the trustee.
What is the settlor?
The settlor transfers the legal title of the trust property to another.
What can a trust do?
-Divide property to different people
-Split control/ownership
-Manage land - e.g., provide access or preserve the trust property for future generations.
Consequences of beneficiary equittable
- Beneficiary can transfer their beneficial interest to others
-Beneficiary can collectively bring the trust to an end.
Does a trust need an intention?
-There must be an intention to create the trust, it cannot be a gift.
What is an express trust?
An express trust occurs when the settlor or person creating the trust explicitely states their intention to create the trust through a written legal document
What is an implied trust?
An implied trust is created through the implied actions of the parties involved, an implication that the parties intended to create the trust.
What are the key components of the certainty of subject matter?
- The property must be indentifiable
-Described with sufficient clarity.
-Certainity as to the benefit of it
What is the beneficiary principle?
For a trust to be valid, it must benefit specific individuals that can clearly be identified.
What does equity not recognise?
The creation of a trust for general purposes without indentifiable beneficaries.
What is the trustee required by the court to do?
Ordered by the court to manage the property in a way that respects the right of someone else
How are equitable rights established?
Equittable rights are established through legal disputes where someone asserts their rights against the legal owner of the property.
-Trustees fiduciary duties are tied with the beneficaries, if a trustee cannot assert their rights, they might not have obligations to fulfil for the benefit of the trust property.
Reasons why a trust might not be valid
- Uncertainty of objects - Where the beneficiary of a trust are not clearly identified or are two vague for the trust to be administed e.g., ‘ for charitable purposes’.
What does a trust need in order to be valid?
- Beneficaries must be clear and identifiable, if they are uncertain then trust may fail (uncertainity of objects)
What is the beneficiary principle?
States that for a trust to be exist/be valid it must be enforceable
- Need someone with sufficient interest in enforcing the trust which would be the owner of the trust (the beneficiary)
-Therefore trust must be for persons
