Unit 1

Question 1

Holds the legal title of trust property

Answer 1

Trustee

Question 2

Holds the equitable interest of trust property

Answer 2

Beneficiary

Question 3

Define equitable interest

Answer 3

A beneficial interest that splits into two parts:
Personal right to enforce trustees’ duties and seek compensation for breaches

Proprietary right- ownership interest- which can be enforced against the trustee and successors in title and is itself property

Question 4

Examples of Fixed Trusts

Answer 4

‘On trust for X for life remainder to Y’

On trust for A if he attains 21 but if he dies before then, for B

On trust for C (C is an adult with full mental capacity)

Question 5

What is a discretionary trust?

Answer 5

Gives trustees discretion about amounts beneficiary may receive/ whether they do so at all

Question 6

Who has equitable interest in a discretionary trust?

Answer 6

No individual does until trustee exercises discretion in their favour- until then they just have hope they will be chosen by the trustee

Question 7

Is my interest unconditional?

Answer 7

Vested- yes

Contingent- no

Question 8

When can I benefit?

Answer 8

In possession- now

In remainder- later, after another beneficiary’s right has expired

Question 9

What makes someone’s right ‘absolutely entitled’?

Answer 9

Saunders v Vautier

‘Vested, in possession and not limited in enjoyment’

Question 10

What are the two categories of creation of trust?

Answer 10

Express

Implied

Question 11

How can express trusts be made?

Answer 11

2 ways

In a settlor’s lifetime by declaring self a trustee or transfer property on trust to trustees

By will- settlor is then called a testator (or testatrix)

Question 12

How many types of implied trust are there?

What are they?

Answer 12

2

Resulting- implied situations e.g. where there is a gap in beneficial ownership

Constructive- where it would be unconscionable for legal owner of property to deny claimant an equitable interest

Question 13

Staute regarding requirements of creating a will?

Answer 13

s9 Wills Act 1837:
Must be made in writing
Must be signed by the testator in the joint presence of two witnesses

Question 14

How would one change a will after it has been created?

Answer 14

Via codicils, must meet same requirements of s9 that original creation of a will must meet

Question 15

Types of gifts…

Answer 15

Devise- gift of freehold land

Legacy/ bequest- gift of personal property

Specific gifts- gifts of an asset or group of assets which are distinguished from other assets of the same kind

Pecuniary legacies- gifts of money

Residuary gift- what remains after payments of debts etc.

Gifts on trust

Question 16

Define ademption.

Answer 16

1/2 ways a gift can fail

Testator no longer possess the specified property

Question 17

What can lapse?

Answer 17

A gift

This is where the beneficiary dies before the testator so the gift fails

Question 18

The three ways a will can be revoked?

Answer 18

Marriage of the testator

Destruction of the will with intention to revoke

Making a new will which deals with the same property as the first will

Question 19

What are the intestacy Rules?

Answer 19

Apply to the whole estate if the deceased made no will

All of the deceased estate passes to his PRs who use it to pay tax/ debts

What remains is shared between some of the deceased’s relatives in accordance with a specified formula

Question 20

What rules govern the distribution of an estate in the absence of a will?

Answer 20

The intestacy rules

Question 21

What are the three types of Express trust?

Answer 21

Fixed: 2+ beneficiaries, requires agreement between them

Bare: 1 beneficiary

Discretionary: trustees takes active relationship with beneficiary and makes managerial decisions

Question 22

Define a trust

Answer 22

Binding obligation placed on a person (trustee) to look after property for the benefit another (beneficiary)