Trusts

Question 1

What are the three certainties required for a valid express private trust?

Answer 1

Certainty of:

1. Intention to create a trust
2. Subject matter i.e. property
3. Objects i.e. beneficiaries

Question 2

When must a settlor’s intent to create a trust be expressly manifested?

Answer 2

When they own the property

Question 3

What is a precatory expression and what is the effect of this?

Answer 3

A settlor’s mere hope, wish, or suggestion that property be used in a certain way is not sufficient to show intent to create a trust, i.e. impose a binding obligation on a trustee

I’m giving you £10,000 in the hope you will use it for your child’s education vs I’m giving you £10,000 to use for your child’s education

Question 4

What happens when a trust fails for uncertainty of intention?

Answer 4

The property passes as a gift to the person who would be trustee

Question 5

Whilst the subject matter must be clear, when may an apparently uncertain description be valid?

Answer 5

When it is capable of objective definition, e.g. a reasonable income

Question 6

What happens when a trust fails for uncertainty of subject matter?

Answer 6

Property reverts to settlor

Question 7

Regarding objects, what will cause a discretionary trust to fail?

Answer 7

Where there are so many beneficiaries that the trust is administratively unworkable

Question 8

What happens when a trust fails for uncertainty of objects?

Answer 8

A resulting trust in favour of the settlor or the settlor’s successors is presumed

Question 9

Who may be a trustee?

Answer 9

Anyone with capacity to acquire and hold property for their own benefit, e.g. a private individual, a professional person, or a trust company, but not a minor

Question 10

What are the two rules against perpetuities?

Answer 10

1. Remoteness of vesting rule
2. Inalienability rule

Question 11

What topics does the full Trusts deck contain, and how do I access it?

Answer 11

The full deck contains over 240 flashcards dealing with the SRA syllabus:

• General Principles;
• Express Private Trusts;
• Resulting Trusts;
• Trusts of the Family Home;
• Charitable and Purpose Trusts;
• Appointment, Retirement, and Removal of Trustees;
• Trustees’ Duties and Powers;
• Liability for Breach of Trust.

Access is currently £25 per full subject, e.g. Trusts, or £250 for access to all 16 SQE1 decks / £200 for 13 SQE2 decks. Visit www.cleverprep.co.uk to arrange full access.