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SQE 1 > Trusts > Flashcards

Trusts Flashcards

1
Q

Types of Express Private Trusts

A
  1. Fixed
  2. Discretionary
  3. Purpose
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2
Q

Express Private Trusts Key Requirements

A
  1. Express Intention
  2. Subject Matter
  3. Object
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3
Q

Number of Trustees Required

A

Usually 1 (2-4 for Land)

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4
Q

Rules Against Perpetuity

A
  1. Contingent interest void if it does not vest within 125 years
  2. Noncharitable trusts - limited to 21 years or life in being plus 21 years
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5
Q

Inter Vivos Trusts

A
  1. Trusts created during lifetime
  2. Settlor can declare themselves trustee
  3. Trust with another as Trustee
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6
Q

Exceptions to “Equity will not Assist a Volunteer”

A
  1. Every Effort Test
  2. Donatio Mortis Causa
  3. Rule in Strong v Bird
  4. Proprietary Estoppel
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7
Q

Requirements of Testamentary Trust

A
  1. Valid Will
  2. Appropriate Trustee
  3. No breach of perpetuity rules
  4. No transfer requirement at the time of creation
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8
Q

Secret Trust Fails if

A
  1. Trustee fails to accept
  2. Did not know until after settlor’s death
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9
Q

Half Secret Trust requires

A

communication of beneficiary’s identity must be made on or before will execution

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10
Q

Fixed Trusts: Vested Interest

A

No condition attached to interest

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11
Q

Fixed Trusts: Contingent Interest

A

Condition attached to interest

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12
Q

Fixed Trusts: Limited Interest

A

No Right to Trust Capital

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13
Q

Fixed Trust: Absolute Interest

A

Right to Capital and Income

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14
Q

Rule in Saunders v Vautier

A
  1. Terminate Trust
  2. If all beneficiaries have absolute interest, adults and sound of mind
  3. Can apply to fixed or discretionary
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15
Q

Resulting Trust Arises

A
  1. Voluntary Transfer or Purchase in Name of Another
  2. Failure to Exhaust Beneficial Interest under Express Trust
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16
Q

Requirements for Resulting Trust in Real or Personal Property

A
  1. Money used to purchase property
  2. Money must be provided at or before time title vests in trustee
  3. Claimant has burden of proving they paid towards purchase
17
Q

Presumption of Advancement in Resulting Trusts

A

Under the obligation to provide for the other party (look at relationship)

18
Q

Family Homes: Legal Title in One Name - Proprietary Estoppel

A
  1. Assurance
  2. Reliance on Assurance
  3. Detriment
19
Q

Common Intention Constructive Trust

A
  1. Common Intention
  2. Reliance to Claimant’s Detriment
20
Q

Charitable Trusts: Rules Against Perpetuity

A
  1. Does not apply
  2. Initial gift within 80 years
  3. subsequent gifts from charity can happen anytime
21
Q

Requirements for Charitable Trusts

A
  1. Fall within defined charitable purpose
  2. Public benefit
  3. Exclusively charitable
22
Q

Cy-Pres Doctrine

A
  1. Applies to Charitable Trusts
  2. Impossible or Impractical, Court will apply trust property to similar charitable purpose
  3. Initial failure: General Charitable Intent Required
  4. Subsequent Failure: No Charitable Intent Required
23
Q

Denly Trust

A
  1. Human beneficiaries can enforce trust
24
Q

Honorary Trust

A

Perpetuity Period applies: Human life in being plus 21 years

25
Q

Hierarchy of power to replace trustees

A
  1. Document
  2. Continuing trustees
  3. Personal representatives
  4. Court
26
Q

Retirement without appointing (2)

A
  1. Consent of co-trustees and any person named in trust document
  2. At least two trustees or trust corporation must remain in office
27
Q

Duty Not to Profit from Trusteeship

A
  1. When trustee can prove that they were going to be appointed director anyways
28
Q

Duties of Trustees

A
  1. Deal appropriately with the trust property
  2. Statutory duty of care
  3. Traditional duty of care
  4. Act jointly if there is more than 1 trustee
  5. Act personally and not delegate
  6. Take possession of trust property
  7. Keep accounts and records
  8. Act impartially and treat them all equally
  9. Confidentiality
  10. Invest
29
Q

Duty to Invest (4)

A
  1. Authorised investments
  2. Criteria
  3. Advice of Investments
  4. Review
30
Q

Power of Maintenance

A
  1. Interest in income
  2. Paid directly to school or parent/guardian
  3. Ends when beneficiary turns 18
31
Q

Power of Advancement

A
  1. Vested, Remainder, Contingent Interest
  2. Amount must not exceed entitlement
  3. Advances must be factored into final distribution
  4. Consent of person with prior interest is required
32
Q

Liability of Trustees

A
  1. Only trustees responsible liable
  2. When more than one - liability joint and several
  3. 6 year limitation period
33
Q

Bona Fide Purchaser Liability

A
  1. Paid in good faith and without notice
  2. No claim against person
34
Q

Innocent Volunteer Liability

A
  1. No personal claims
  2. Proprietary claims allowed
35
Q

Knowing recipient

A
  1. Beneficiaries can bring personal claim
  2. Proprietary claims allowed
36
Q

Dishonest Accessory

A
  1. Personally liable
  2. Can be active or passive
  3. Proprietary claims unlikely

SQE 1 (15 decks)

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