Trusts - introduction, types, certainties

Question 1

Equity

Answer 1

Mitigate rigours of common law
Vicim of wrong with more options for re-dress

He who comes to equity must come with clean hands
Equity will not assist a volunteer

Question 2

Absolute owner

Answer 2

Both legal and equitable.

Question 3

Trust

Answer 3

Legal trustees

Equitable - beneficiary

Question 4

Legal title (trustee)

Answer 4

Managing, subject to onerous duties.

Question 5

Equitable (beneficiary)

Answer 5

Ultimately belongs to them.
Can sell or gift interest.

Question 6

Classifications

Answer 6

Express trusts -
settlor expressly intends to create

Implied
Resulting - presumed where settlor would have intended if they thought about it.

Constructive -
Implied to achieve fair result.

Question 7

When can be created

Answer 7

During lifetime and on death in will.

Valid lifetime trust;
make a valid declaration
ensure property put into trust.

Will trusts -
complies with s9
direct in will that title to trust put in hands.

Equitable interest back to settlor if something goes wrong.
If settlor dead to residue of estate.

Question 8

Express trusts

Answer 8

make valid declaration
put assets into the trust.

Must;
identify trustees
identify property held in trust
identify beneficiaries
identify powers and duties

Question 9

Fixed interest trusts

Answer 9

No discretion. ‘Fixed’,

Question 10

Discretionary

Answer 10

Trustees discreiton.

Question 11

Three certainties

Answer 11

Intention -
words must impose duty on trustee to hold property for someone else. Can be just actions.
Precatory words (hope, wish) do not amount to intention.
Law can rely on presumption to ascertain intention.

Subject matter -
Trust matter
Beneficiaries interests.

Must be identifiable.
If collection identical can be done over part of collection.

If transfer property to third party and declares person should be trustee over ‘some of it’, no trust is created.

if normal trustee holds for settlor on resulting trust.

Objects
The beneficiaries.

Fixed interest (complete list test)
draw up complete list of each beneficiary.
If class of people need
Conceptual certainty - description of class clear and objective
Evidential certainty - evidence to identify all beneficiaries.

Discretionary trusts -
Given postulant test;
can it be said with certainty whether any given postulant is or is not a member.
Conceptual certainty needed.

Administrative unworkability - so hopelessly wide.
Too large to survey.

Capriciousness -
no rational reason.

Question 12

Beneficiary principle

Answer 12

For benefit of individuals

Question 13

Perpetuities

Answer 13

Alienation of capital
Must vest in 125 years.

Question 14

Formalities

Answer 14

Lifetime - orally.

Land s53(1)(b) - must be manifested and proved by some writing signed by person.
Email counts (signature by typing out name).

Question 15

Consitiution

Answer 15

Settlor declares themselves trustee -

Settlor appoints third party-
Take steps to put legal title of trust property into hands of trustee.

Land -
execute a deed -
persons making signs in presence of a witness.
Registered form TR1.
Give deed to trustee or land registry.

Shares-
CREST system (public quoted shares in scheme).
Otherwise
Execute stock transfer form
give executed stock transfer form and share certificate to trustee or send to company direct.
Secretary will then register the trustee as new shareholder.

Money -
with delivery.
Cheque once cleared.

Chattels -
delivery or deed.

Question 16

Equity will not assist a volunteer -

Answer 16

someone who has not provided consideration for transfer of property.

Exceptions to rule;

Every effort test;
Passed point f no return ‘beyond recall’.

Even if not done might be deemed unconscionable not to do so (Pennington v Waine 2002).

Song v Bird
-Trustee same as executor. Did not get round to transferring legal title.

Conditions-
-settlor intended to create immediate trust with third party acting as trustee
-trust not immediately created due to failure to comply with relevant transfer rule
-settlors intention continued up to their death
-intended trustee acquired legal title to trust property by becoming settlors executor or administrator.

Question 17

Settlor appoints themselves and third party

Answer 17

Take steps to put in joint names

Must give effect to trust, cannot rescind.

Question 18

Entitlement

Answer 18

Capital- underlying value of property

Income - money on regular basis deriving from ownership of property.

Vested interest -
if die belong to estate (beneficiary estate).
If minor on trust until 18.
Will hold on bare trust even once 18 until beneficiary requests.

Contingent interests -
Conditional on future event.
If dies interest goes back to settlor.

Life interest -
if remainder man dies goes to his estate.

if part fixed/discetionary - no interested until selected.

Question 19

Saunders v Vautier

Answer 19

bare trust (adult and vested) absolutely entitled.
Must handle as beneficiary dictates.

Can call for end of trust.
As long as people who entitled;
-in existence and ascertained
-aged 18 or over
-agree to what is being proposed.