trusts law Flashcards
when is a trust enforceable
when the settlor has:
a. made a valid declaration of trust
b. put assets in the trust
what is a fixed interest trust
trustees have no discretion as to how trust property is distributed
what are the three certainties
a. intention
b. subject-matter
c. object
- fixed interest: must be able to draw up list of beneficiaries
- discretionary trust: given postulant test applies
can you create a trust over future property
no
what happens where a trust fails on certainty of object
it creates a resulting trust in favour of the settlor
when is a trust with settlor as trustee validly constituted
when they declare themself trustee
when is a 3rd party as a trustee trust validly constituted
when settlor has declared them so and has taken steps to put title in hands of trustee
how does settlor create trust in land
execute deed and give it to trustee or registry
how does settlor create trust in shares
electronic system or share transfer form and send to trustee
how does a settlor create a trust in money and chattels
by delivering them to the trustee
exceptions to ‘equity does not assist a volunteer’
a. where trustee was executor and trust failed before death
b. the every effort test
what is the inalienability rule imposed on purpose trusts
capital cannot be locked away for more than 21 years
valid charitable purpose trust
a. be for charitable purpose
b. have sufficient public benefit
i. clear and identifiable
ii. not unreasonably restrictive
c. be exclusively charitable
i. not political or make profit
valid non charitable purpose trusts
a. Re Denley trust where declaration identifies individuals who will benefit
b. trusts of imperfect obligation - valid but unenforceable
when is a resulting trust presumed
a. voluntary transfer of personalty where transferor retains equitable benefit
b. voluntary transfer of land where additional evidence indicates trust
c. purchase money cases
when does presumption of advancement apply
a. father gifting child
b. person in loco parentis gifting child
c. husband gifting wife
d. fiancé gifting fiancée where they subsequently marry
how to prove CICT on a jointly owned property
a. evidence agreement or common intention
b. on which they relied
c. to their detriment
d. court considers whole course of dealing
how to prove CICT on solely owned property
demonstrate common intention on which claimant relied detrimentally
a. contribution to purchase / mortgage price
b. express can have domestic evidence of detrimental reliance
what is proprietary estoppel
a. legal owner created expectation that claimant would receive interest
b. claimant relied on this assurance to their detriment
note - court may refuse remedy if unreasonable delay in bringing claim
how may a trustee retire
via deed
when can a trustee retire without a replacement
a. where 2 trustees or a corp left
b. retire by deed
c. other trustees consent by deed
when may court remove or appoint a trustee
if it is in the best interests of the trust
which beneficiaries may remove or appoint a trustee
one who is absolutely entitled unless its excluded by trust instrument
when may a trustee be replaced
a. dead
b. outside country for 12 months
c. disclaim
d. unfit
e. incapable or minor
when is power of maintenance applicable under s31
for maintenance, benefit or education of a beneficiary under 18 where no prior interest to income exists
when is power of advancement under s32 applicable
for the beneficiaries benefit, if prior interest holders have given permission
what duty of care are trustees under
that of an ordinary prudent man of business managing his own similar affairs (higher for paid trustees)
what is the general power of investment
trustees must invest property as if they absolutely own
to what must trustees have regard when investing
a. suitability and diversification
b. obtain and consider proper investment advice
what is a trustee’s fiduciary duty
not to make a profit, place himself in conflict or act for his own benefit wihtout informed consent of beneficiary
trustee defences to personal claim
a. exclusion in trust instrument
b. acted honestly and reasonably
c. had the knowledge and consent of beneficiaries
what is intermeddling
where a 3rd party acts as a trustee, they will be liable for any losses caused
what is knowing receipt
where 3rd party received property in breach of trust for their person benefit and their knowledge makes it unconscionable
how does tracing work with an innocent volunteer
only traceable if property in original form / clean substitution / mixed asset & first money out is first in
