Validity Flashcards
Q1. Under Article 7(1)-(2), in what ways can a Jersey trust come into existence?
A1. It can be created in any manner:
Orally,
By an instrument in writing (including a will),
By conduct (actions evidencing an intention to hold property on trust).
Q2. Which type of express trust must be created by an instrument in writing?
A2. A unit trust (a collective investment vehicle).
Q3. Does Jersey law require a “deed” (as in English law) to create a trust?
A3. No. Jersey law uses the concept of an “instrument in writing” instead; there is no separate formality called a “deed.”
Q4. Is there a special writing requirement for trusts over land in Jersey, similar to English law?
A4. No. Jersey law does not require written evidence specifically for land trusts (although there is a separate restriction on Jersey immovables in Article 11(2)(a)(iii)).
Q5. What does “constitution of a trust” refer to?
A5. It means ensuring the trust property is vested in the trustee so the trust is properly established.
Q6. What are the two main ways to constitute an express trust?
A6.
Transfer method: Settlor transfers assets to a trustee on trust, and the trustee accepts.
Declaration of trust: The settlor declares themselves trustee of their own assets
Q7. What is the general rule if a failed transfer occurs (e.g., the settlor tries to transfer shares but doesn’t complete the paperwork)?
A7. Under the rule in Milroy v Lord, a failed transfer is not automatically treated as a self-declaration of trust. It simply fails unless properly completed.
Q8. Why is having actual trust property essential for a valid trust?
A8. A trust requires identifiable property held by the trustee. If there is no property or it’s uncertain, the trust is invalid.
Q9. Under Article 8, can any kind of property be placed into a trust?
A9. Yes—almost any property type (movable or intangible), except for certain exceptions in Article 11(2).
Q10. Which Article 11(2) restriction limits holding Jersey immovable property in a trust?
A10. Article 11(2)(a)(iii) says a trust is invalid to the extent it purports to apply directly to Jersey immovables. Indirect holding (e.g., through shares in a company) is allowed.
Q11. What intention must the owner of property have to create an express trust?
A11. They must genuinely intend to subject the property to a trust (not to gift, lend, or do nothing). Unclear intention can invalidate the trust under Article 11(2)(b)(iii).
Q12. What is the “presumption of advancement” in Jersey law?
A12. If a person (e.g., a husband) transfers property to a spouse or child, it is presumed to be a gift rather than a trust, unless the contrary is shown.
Q13. What happens if A creates a trust “for C for life” but specifies no remainder beneficiary after C’s death?
A13. The beneficial interest is not fully “exhausted.” Usually, the property “results” (reverts) to the settlor or is treated as held on a resulting trust for the settlor’s estate, unless there’s evidence to the contrary.
Q14. Do constructive trusts require the express intention of the property owner?
A14. No. Constructive (and resulting) trusts arise by operation of law, often through wrongdoing or equitable principles, independent of the parties’ explicit intentions.
Q15. Does the Article 11(2)(a)(iii) ban on direct trusts of Jersey immovable property prevent constructive trusts of immovables?
A15. It’s debatable. Some cases suggest it might not apply to fraud or breach-of-trust scenarios (so a constructive trust could still arise). Others are skeptical. The issue remains partly unresolved.
Q16. Summarize the main conditions for a valid express trust in Jersey.
A16.
Proper form (no special form needed except for unit trusts).
Identifiable property vested in or declared by a trustee.
Clear intention to create a trust, not a gift or loan.
No direct trust of Jersey immovables (Article 11(2)(a)(iii)), though indirect ownership (e.g., shares) is permissible.
