Unit One (Key Info)

Question 1

Created in a life time =

Answer 1

Inter vivos

Question 2

Person creating lifetime trust is called…

Answer 2

Settlor

Question 3

Document setting out terms of the trust =

Answer 3

the ‘settlement’ or ‘declaration of trust’

Question 4

What is a trust?

Answer 4

“a trust is a relationship recognised by equity which arises where property is vested in a person or persons called the trustees, which those trustees are obliged to hold for the benefit of other persons called beneficiaries”

Question 5

Legal owner =

Answer 5

Trustee

Question 6

Equitable owner =

Answer 6

Beneficiary

Question 7

What is an express trust?

Answer 7

Where someone is expressly setting out to achieve a trust

Question 8

The nature of a beneficiary’s interest varies depending on…

Answer 8

the words used in the creation of the trust

Question 9

A beneficiary’s interest in a fixed trust may be descrives as all or any of these:
- vested
- contingent
- in possession
- In remaider
- Absolute
- Limited
what do these mean?

Answer 9

• Vested = uncondifitonal
• Contingent = conditional
• In possesion = now
• In remainder = later
• Absolute = the lot; capital and income
• Limited = income only

Question 10

Fixed trust examples

Answer 10

e.g. “on trust for A if he attains 21 years, but if he dies before doing so to B” (contingent)
e.g. “on trust for A for life, remainder to B” (vested)

Question 11

Discretionary trust examples

Answer 11

e.g. “on trust to distribute between students studying equity at the Uni of Leicester, and in such shares, as Steve at his discretion shall select”

Question 12

Bare trust

Answer 12

e.g. banks and bank accounts
- Where someone holds an asset in their name, purely as a nominee for another individual, they have to do what you tell them to do with it as you are the holder.

Question 13

Formalaties required to make a trust

Answer 13

Land
Company
Banknotes
Chattels
Existing Equitable Interests

Question 14

Land

Answer 14

• Most important asset
• All conveyences of land need to be made by deed
• needs to be signed as a deed
• witness needs to sign it

Question 15

Company

Answer 15

Shares
Stock Transfer Act 1963 - delivery of the share certificate plus signed stock transfer form required

Question 16

Banknotes

Answer 16

no formalities required for the valid transfer of such assets - delivery and intention are only requirements

Question 17

Existing Equitable interests

Answer 17

Law of Property Act 1925 s.53 (1)(c) -
“a disposition of an equitable interesr or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing, or by will”