Trusts

Question 1

Equity

Answer 1

How trusts developed

Question 2

Modern trusts

Answer 2

Developed by a donor giving legal title to one person (trustee) while giving equitable title (the use/benefit) to another (the beneficiary)

Question 3

History

Answer 3

Developed a set of rules at equity (not CL) to combat inequities

Question 4

Use - Stage 1

Answer 4

A to B in fee simple for the use of C in fee simple. The holder of the legal title was compelled to hold the interest for the benefit of the beneficiary, as a trustee

Question 5

Use - Stage 2

Answer 5

Statute of Uses implemented (King losing income due to the use, outlawed it, making C the legal title holder)

Question 6

Use - Stage 3

Answer 6

Loopholes. Exhausting the statute to make a double use.(A to B in fee simple to the use of D in fee simple to the use of C in fee simple)

Question 7

Use - Stage 4

Answer 7

This is the modern trust. Words for the double use were shortened. “A to the use of B in fee simple in trust for C in fee simple” –> “A to B in fee simple in trust for C in fee simple”

Question 8

Modern trust

Answer 8

Courts look for certainty of intentions to create a trust, certainty in regard to the subject matter, certainty as to who the beneficiary is

Question 9

Nemo dat

Answer 9

If trustee sells estate to purchaser without telling them, they can’t give what they don’t have

Question 10

Doctrine of notice

Answer 10

Beneficiary is protected unless the person buying is a bona fide purchaser for value and did not have notice

Question 11

Re Swan

Answer 11

Mom died. Gave jewelry to daughter. If daughter died childless, it goes to son. Daughter did die childless. Son claims compensation for items broken. Trust used to create estate-like succession for personalty, splitting the legal title from the use. (the first taker - daughter - was a trustee for the remainderman - son - subject to their own life interest - daughter. When she dies, her estate takes over for as trustee for the ultimate beneficiary.

Question 12

Re Fraser

Answer 12

Will gave life interest to wife, with the residue to a charity. Charity has interest in the personalty, but their enjoyment is postponed while the wife has her life interest. She cannot encroach on the corpus (must preserve it for charity). She can only enjoy the revenue. **Successive legal interests in personalty with wills – title is in the ultimate holder, plus the other’s life interest.