trusts

Question 1

what is a trust

Answer 1

where property is held by one person for the benefit of another with legal and equitable ownership being seperated

Question 2

the elements of a modern day trust

Answer 2

a settlor
who transfer legal title of property to a trustee
who is holding the property on trust
for the benefit of a beneficiary

example- wills (testamentary) , co-ownership of land (inter vivos)

Question 3

2 types of trusts

Answer 3

express- states a trust
and implied- operate through via a statute

Question 4

express trusts

Answer 4

where the settlor expressly transfer legal title in proeprty to the trustee for the benefit of the beneficiary (trust intentionally created)
can be fixed, discretionary or bare trusts
can be inter vivos or testamentary

Question 5

bare trusts

Answer 5

most straightforward
transfers whole estate to trustee for the one beneficiary

Question 6

fixed trust

Answer 6

transfer of property (can be only partial) to the trustee to distribute (according to the terms of the trust) to the beneficiaries

Question 7

discretionary trusts

Answer 7

transfer of property to the trustee to distribute it on his own dicretion to the benficiaries (no identifiable equitable interest so beneficiary cannot enforce trust)

McPhail v Doulton- beneficiaries have no right to enforce the trust until the discretion has been exercised

Question 8

what is a mere appointment?

Answer 8

power of appointment- gives someone who does not own property the discretion as to whether to distribute property at all
beneficiaries have no remedies if the donee doesnt act

Question 9

secret trusts

Answer 9

trustee and benefiary is secret
fully or
half secret- everyone aware of the trust by the trustee but not who the beneficiary is

Question 10

implied trusts

Answer 10

implied by the courts or operation of law
2 types:
resulting- an implication of intention to create a trust was present
constructive- unconsciounable not to impose a trust

Question 11

resulting trusts

Answer 11

imposed where:
1. the s transferred legal title in property to t but has failed to identify B
(t holds property on resulting trust for s and will revert back to s)

2. where a person contributes to the purchase of a property they wll acquire an equitable interest in it

Question 12

constructive trusts

Answer 12

arise by the operation of law and implied by the court where the circumstances are appropriate

arises when someone has acted unconscionably (can be through holding/retaining the victims property)

can remedy in relation to family homes of cohabiting couples
jones v kernott- considered other contributions that may amount to equitable interest, such as maintaing
stack v dowden 2007- developed principles that allowed other contributions to amount to equitable interest

Question 13

reasons for creating an expressed trust

Answer 13

1. segregation of assets- allows trust assets to be seperated from other assets of the settlor
2. management of property- trustee may have specific financial and investment expereince/ the beneficiaries may be too young
3. tax avoidance- having a trust can provide an avoidance fortax liability