Trusts and beneficial entitlement Flashcards
Describe the set up:
Unlimited beneficiaries cap
Recommended that you have at least 2 trustees.
What the limit on trustees when the trust is over land?
Only 4 trustees.
Who owns the trust?
Equitable and therefore, the real ownership with the beneficiary.
The legal title is in the hands of the trustee.
Can the settlor make themselves the trustee?
Yes
What is an express trust?
A trust made deliberately and intentionally.
Can be made orally, written or by deed.
What are the 2 types of express trust?
- Private - will need to comply with the 3 certainities
- Charitable - set up for the public good etc. DOES NOT need to comply with the 3 certainities
What is an implied trust?
When a trust HAS NOT INTENTIONALLY BEEN CREATED, but it has been implied by law.
Things that cause the law to imply a trust is through conduct.
NO need to follow formalities - aka the 3 certainities.
What are the 3 types of implied trusts? Basically, in what situatuons will the law imply the existence of a trust?
- RESULTING TRUSTS - when something is not done right and the equitable ownership in the trust property returns back to the settlor.
- CONSTRUCTIVE TRUST - the law creates a trust because it is in the interests of justice.
- STATUTE TRUST - Trusts Parliament set up by Acts of Parliament
What is a bare trust?
When the trust has reached a stage where beneficiary can collapse the trust . The beneficiaries can therefore use the Saunders v Vautier rights.
This means:
(1) the beneficiary’ies has ABSOLUTE entitlement to the trust property (aka no other beneficiary has or will have claim to it - such as having to survive another beneficiary in order to get the trust)
(2) the beneficiary has reached age 18 or over
(3) beneficiary of sound mind and competent to make a decision
What is the Saunders v Vautier right, basically?
When beneficiaries can demand that the trust be collapsed.
Can be used even when the trust said that it can only be given to beneficiaries when they reach the age of 25.
As soon as they are 18 and the trust is just for them, they can claim it and collapse the trust.
What is contingent interest?
When certain conditions need to be met before beneficiary is entitled to the trust.
When can a Saunders v Vautier right not be exercised?
When there is a gift over the trust - aka someone else potentially be entitled to it.
For example, imagine the trust has contingent interest that beneficiary must attain the age of 24 to receive the trust.
This would mean Saunders v Vautier right can be used to get the trust collapsed and vested as soon as B is 18.
But if there is a gift over - aka trust says B can only get the trust if they survive X, then the Saucnders v Vautier cannot be exercised.
What is a Life Tenant and Remainderman?
Both are beneficiairies under a trust.
- Life tenant = a beneficiary who will get income or live in that property, for life.
- Remainderman - the beneficiary who will receive absolute ownership of property when Life Tenant dies.
Can the Life Tenant and Remainderman complex agree to collapse the trust using the Saunders v V… right?
Yes. If both of them satisfy the conditions of the Saunders v Vautier rights…
What is the difference between fixed and discretionary trust?
Fixed trust: trustee is given a set of instructions - everything has been decided; how much and what each beneficiary should receive.
Discretionary trust: THE TRUSTEE is given the power to decide: (a) who the beneficiaries are (2) and how much they should get
