Trusts Flashcards
Types of Trusts
Express Trusts - Private, Fixed, Discretionary, Purpose
Charitable Trusts
Implied Trusts - Resulting and Constructive
A Settlor who makes a trust during their lifetime, this is known as an inter vivos trust
What are the Three Certainties required for an Express Private Trust?
Certainty of Intention: Clear intention by the settlor to create a trust.
Certainty of Subject Matter: The trust property must be defined with clarity.
Certainty of Objects: Beneficiaries must be identifiable.
Define “Precatory Expressions” in the context of trust creation.
Precatory expressions are words that express a hope, wish, or suggestion but do not create a binding obligation for the trustee, often failing to establish a trust.
What happens if there is uncertainty of intention in a trust?
If the intention is uncertain, the trust is void, and the property may pass outright as a gift to the intended trustee.
What is certainty of subject matter?
Must be clear as to what property is to be bound to the trust. Generally, phrases which are subjective are not sufficient for creating a trust. Trust property must be existing in interest in property
Explain the “Complete List Test” and its application in Fixed Trusts.
In Fixed Trusts, the Complete List Test requires that all beneficiaries are identifiable so that the trustee can distribute assets accurately. Beneficiaries not part of a qualifying group may still be valid if they are ascertainable by the time of their interest.
What are the formal requirements for creating a trust of land versus personal property?
Land Trusts: Requires a written and signed declaration by the settlor.
Personal Property Trusts: No formal requirements; can be created orally.
When could a class of beneficiaries fail under a discretionary trust
If the class is too large rendering the trust unworkable i.e making a trust for the population of Bristol
Requirements of trustees
Must be 18
Have mental capacity
No minimum number is required however a trust in Land will require at least 2 trustees
Rules against perpetuity
A trust must vest within 125 years
For non charitable purpose trusts - They are limited for 21 years or the life of a living person plus 21 years
Requirements for settlor to be a Trustee as well
They must demonstrate with words or actions that they intend to be legally bound. Certainty, beneficiary principle, and perpetuity requirements also apply.
Donatio Morits Causa principle
A gift may be enforced if:
The settlor gave the property to the trustee and made it in contemplation of imminent/impending death.
With intention the gift is given to the Donee if the donor dies and returned if the donor survives and;
The donor Dies.
Describe “Secret Trusts” and “Half Secret Trusts.”
Secret Trusts: Fully concealed in the will; the trustee knows the purpose and beneficiary separately.
Half Secret Trusts: The existence of the trust is mentioned in the will, but the identity of the beneficiary remains undisclosed.
Failure of secret trusts
If the Trustee expressly refuses or did not have knowledge of the trust until after the death of the settlor. It does not matter if the trustee failed to respond or intended to carry out the trust or not, unless they expressed their refusal to the settlor the trust can still be enforced.
Failure of half trusts
As long as the identity of the beneficiary was communicated to the trustee at the time or before the making of the Will and it’s language is consistent with its communication
What is a Resulting Trust?
A trust implied by law based on the presumed but unexpressed intention of the settlor. The equitable interest reverts to the settlor or their estate if the settlor is deceased.
When does a resulting trust arise in voluntary transfer cases?
When an individual transfers property without consideration and no evidence shows the reason for the transfer, equity presumes that the transferee holds the property on trust for the transferor.
Explain the concept of “Purchase Money Resulting Trust.”
If one party (X) provides the purchase money but the property title is in another’s (Y’s) name, it is presumed that Y holds the title on trust for X. The beneficial interest is proportional to their contributions.
How can the presumption of a resulting trust be rebutted?
By showing evidence that the transfer was intended as:
A gift.
A loan.
Payment of a debt.
What is the Presumption of Advancement?
This is exemption to the presumption of a resulting trust where someone is under moral obligation to make firinal provision for another:
Husband for a wife/fiance
Father for child
Someone stands as loco parentis for another
This can also be rebutted with evidence to the contrary.
Give examples of when resulting trusts arise due to failure of express trusts.
.
Failure of a contingent interest (e.g., beneficiary dies before fulfilling a condition).
Lack of certainty of objects (e.g., beneficiaries not clearly identified).
Failure of a secret trust due to lack of proper communication.
What evidence is admissible to rebut the presumption of advancement?
Surrounding circumstances at the time of transfer and contemporaneous acts or declarations, but not subsequent actions
What are the two main types of purpose trusts in English law?
Charitable Trusts: For public purposes, benefiting society.
Noncharitable Purpose Trusts: For private purposes, benefiting no specific human beneficiaries.
What are the unique features of charitable trusts compared to private trusts?
No need for ascertainable human beneficiaries.
Cy-pres doctrine applies to redirect purposes if the settlor’s original intention is impossible at the courts direction
Charitable trusts can be perpetual.
List some purposes recognized as charitable under the Charities Act 2011.
Relief of poverty.
Advancement of education, religion, or health.
Environmental protection or improvement.
Advancement of human rights or amateur sport.
Relief of those in need due to age, illness, or hardship.
What is the Cy-pres doctrine?
A legal principle allowing the court to redirect trust funds to a purpose similar to the original charitable intent when the specified purpose is impractical or impossible to carry out.
What are the requirements for a charitable trust to be valid?
The purpose must be charitable as defined by the Charities Act.
Must be for the public benefit (identifiable benefit to the public or a significant segment of it).
The purpose must be exclusively charitable.
Political purpose will not constitute as charitable
What is the rule against perpetuities for noncharitable purpose trusts?
Noncharitable purpose trusts must comply with the perpetuity period (21 years or a human life in being plus 21 years). Trusts violating this rule fail from the outset.
Provide examples of noncharitable purpose trusts recognized in English law.
Trusts for the maintenance of specific animals.
Trusts for saying private masses.
Trusts for maintaining graves or tombs.
What are Denley trusts, and how do they differ from traditional purpose trusts?
Denley trusts are private purpose trusts benefiting identifiable human beneficiaries who can enforce the trust. Unlike traditional purpose trusts, these are valid because of the identifiable human element.
