Trusts Revision Flashcards
Once an interest has vested, the beneficiary is entitled to it and the interest will not fail
In the case of land, the declaration must be evidenced by some writing signed by the settlor
A declaration stating how the beneficial interest is held is conclusive
The legal title to chattels is transferred either by delivery or by deed but if this doesn’t take place before the settlor’s death but the intended trustee later acquires the legal title as personal representative of the settlor, the trust is regarded as completely constituted provided that the settlor’s intention to create the trust continued until death.
Where an individual contributes to the purchase of property in the name of another and there is no evidence that a gift was intended, the usual presumption is that the legal owner holds on resulting trust for himself and the other party in proportion to their respective contributions. This presumption does not apply where the contributor was the father or husband of the legal owner, or was acting in loco parentis to the legal owner. In these cases the presumption of advancement applies and it is presumed that the contributor intended to make a gift unless he can prove that he did not.
A constructive trust is one imposed by the court on grounds of conscience
The usual rule is that a trust which is to take effect on death must be declared in a valid will. Where a trust is declared in a will but the beneficiary is not identified, there will be a valid half-secret trust only if the identity of the beneficiary was communicated to the trustee before the will’s execution and the wording of the will is consistent with that communication.
A trust of land must be evidenced by signed writing, then constituted by transferring legal title by deed. The title then must be registered in accordance with the requirements of the relevant statutory provision.
A deed is used to transfer legal title to the trustee, not to create a trust
If a property transfer was made as part of an illegal or fraudulent transaction, the court must decide whether it is in the public interest to allow a claim. The court would take into account all relevant factors, including the underlying purpose of the relevant law and the respective conduct of the parties.
A trustee may retire without replacement only if he leaves in office 2 trustees or a trust corporation, and his co-trustees consent by deed.
A trustee may be replaced where he desires to be discharged provided that a replacement is appointed and the appointment is made in writing. The appointment must be made by the retiring and continuing trustees.
The ‘fair dealing rule’ applies to the purchase by a trustee of a beneficiary’s interest. A trustee may purchase the interest of a beneficiary provided that the price is fair and full disclosure of all material facts is made.
Where a breach has occurred, trustees are only liable to make good the loss caused by the breach.
Trustees may delegate investment decisions to an investment manager and will not be liable if they follow the procedures laid down by statute.
A trustee may delegate administrative functions and may also delegate investment decisions to an investment manager provided they take account of the requirements laid down in the Trustee Act 2000.
The personal representatives of a deceased trustee only have power to appoint new trustees where a sole trustee dies
Where a beneficiary has an interest in the capital of a fund, the trustees have power to advance capital for the beneficiary’s advancement or benefit. The trustees must obtain the consent of any beneficiary with a prior interest in the income of the fund.
Where a third party acts as an accessory to a breach of trust, they become personally liable as if they were a constructive trustee. To establish accessory liability, it must be shown that the third party accessory was dishonest-that is, they did not act as an honest person would in the circumstances. It is not necessary to show that the third party knew that a breach of trust was committed.
A private trust must comply with the inalienability rule, which means that the capital of the fund must not be tied up for longer than the perpetuity period.
If a property transfer was made as part of an illegal or fraudulent transaction, the court must decide whether it is in the public interest to allow the claim. The court would take into account all relevant factors, including the underlying purpose of the relevant law and the respective conduct of the parties.
A person who receives trust property is personally liable in equity if their state of knowledge was such as to make them liable as if they were a constructive trustee. This applies where the recipient had sufficient knowledge as to make it unconscionable for them to retain the property-that is, where they knew of the breach or where they were suspicious but chose not to ask questions
An individual must transfer the property to the trustee and to make a valid declaration of trust for a trust to be valid
When a trustee places trust funds into a bank account with the trustee’s own money, the beneficiaries may claim a charge over the account for the amount of the trust funds in it. If the trustee has drawn money out of the account, the basic rule is that the trustee is treated as withdrawing their own money first. If the trustee dissipates the trust money and then subsequently receives their own money, the limit of the beneficiary’s claim is the lowest intermediate balance, which is the balance after the last payment out but before the next payment in.
The court will not take judicial notice of the likely lifespan of the animal, so a gift for an animal’s maintenance will fail unless specific provisions are made limiting its duration.