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Question 1

What are the formalities required for a self declaration as trustee?

Answer 1

Where the settlor declares himself as trustee there is no need to transfer the subject matter to anyone as the trustee already owns the legal title to it. All you need is an effective declaration of trust and this can be done in writing, orally or from the circumstances unless the subject matter is land (Paul v Constance - Mr C declared himself as the trustee of a bank account).

Question 2

What are the formalities required in the case of appointment of third party trustees and making of an outright gift?

Answer 2

The subject matter must be transferred to the trustee of the donee, the legal title must be transferred properly depending on the type of property in question.

Question 3

What formalities are required if the subject matter is land?

Answer 3

Property must be transferred to the transferee and they must be registered as the new land owner if it is a gift but if it is a trust then s53(1)(b) lpa 1925 must be complied with I.e. Evidence in writing (Richards v Delbridge).

Question 4

What formalities are required in the case of shares?

Answer 4

The transferor must execute a stock transfer and then hand this to the transferee along with the share certificate, they then apply to the company for registration.

Question 5

What formalities are required for chattels?

Answer 5

It simply needs to be handed over to the trustee or donee, no formalities are required.

Question 6

Can the settlor revoke the subject matter if it has been transferred?

Answer 6

No, the trustees are obliged to act in accordance with the terms imposed on them and the beneficiaries can enforce the trust.

Question 7

In relation to a self declaration of trust, which of the following statements is correct?
A) the settlor must transfer the legal title to the trustee in order for the trust to be constituted
B) a self declaration of trust can only be effective in writing
C) with a self declaration the settlor is also the trustee

Answer 7

C

Question 8

Which of the following types of property require form filling and registration in order to transfer the legal title to third party trustees or a donee of a gift? Select all that apply. 
A) land
B) jewellery
C) money
D) shares
E) equitable interests

Answer 8

A (land registry, delivery of forms, title deeds and transfer registers with the land registry) and D (stock transfer form, delivery of form, share certificate, registration with the company).

Question 9

What should you address first when considering the issues of formality and constitution?

Answer 9

You must identify the type of provision you are dealing with I.e. Is it an outright gift or a trust? If it’s a trust is it a self declaration of trust or an appointment of third party trustees?

Question 10

What is a volunteer?

Answer 10

A beneficiary that has not given any consideration into the bargain but has been promised something.

Question 11

What happened in the case of Re Ellenborough?

Answer 11

The settlor promised to transfer into a trust money she hoped to receive under a will (future property) but when she inherited it she changed her mind and decided to keep it. There was nothing the beneficiaries could do as they were volunteers.

Question 12

What can consideration be in equity?

Answer 12

• money or money’s worth (paid for the privilege for being a beneficiary)
• marriage consideration - historically both parties would transfer money into the trust or promise to transfer property they would inherit in the future as a nest egg for the marriage

Question 13

What is meant by incompletely constituted?

Answer 13

Where the settlor makes a promise and agrees to transfer the property to the trustees but doesn’t do it.

Question 14

Regarding volunteers, which of the following statements are correct. Select all that apply.
A) a volunteer is someone who has not provided any consideration
B) if someone had paid money to be a beneficiary then equity would view this as consideration and they would not be a volunteer
C) if the trust is a marriage settlement then any beneficiaries of that trust would be deemed to have given consideration in the eyes of equity and would therefore not be a volunteer
D) if a beneficiary is a volunteer then they would not, as a general rule, be able to force the settlor to transfer the property into the trust

Answer 14

A, B and D.
A volunteer is someone who has not provided any consideration.
Paying money to be a beneficiary would be classed as consideration and would therefore not be a volunteer.
If it’s a marriage settlement the beneficiaries would be deemed to have given consideration and would not be a volunteer.

Question 15

In which of the following situations might a beneficiary have a claim at common law to force the settlor to transfer property into the trust? Select all that apply.
A) where the beneficiary has signed the trust deed
B) where the beneficiaries parents have made a marriage settlement
C) where the beneficiary has provided monetary consideration
D) where the beneficiary can rely on the contracts (rights of third parties) act 1999

Answer 15

A and C.

Question 16

The trustees will usually be a party to the trust deed, so ought, in theory, to be able to bring a claim against the settlor if he fails to transfer property into the trust. In this regard, which of the following statements is correct?
A) the trustees have a right to sue the settlor on behalf of the beneficiaries because at common law they are a party to the deed
B) if the trustees were to sue then they would be entitled to substantial damages and could keep the money for themselves
C) if the trustees were only to receive nominal damages then it would not be worth suing for wasting the courts time with the claim

Answer 16

C

Question 17

What is the doctrine of every effort?

Answer 17

It is an exception to the rule that equity will not perfect an imperfect gift.

Question 18

When will the doctrine of every effort apply?

Answer 18

When the settlor/donor has done everything they can to transfer the property to the donee/trustee and the only reason the transfer has not been complete is because the final stages have to be carried out by a third party, normally the trustee/donee (Re Rose).

Question 19

What is proprietary estoppel?

Answer 19

It is an exception to the general rule that equity will not perfect an imperfect gift.

Question 20

For the doctrine of proprietary estoppel to apply what elements must be present?

Answer 20

• an assurance given by X to Y that Y has an interest in a piece of property
• reliance by Y on the assurance
• detriment suffered by Y as a result

Question 21

Give a case example where proprietary estoppel was relied upon?

Answer 21

Dillwyn v Llewellin - father transferred land to son but the correct form was not used, making the transfer invalid. The father then granted the son to build on the land and died. The courts said the transfer should go through as the fathers conduct and permission to build with the reliance by the son on the agreement and the money he would lose if it did not go ahead.

Question 22

Will the court always order the property is transferred if they successfully rely on proprietary estoppel?

Answer 22

No (Dodsworth v Dodsworth) the claimant was financially compensated for the money spent on improving the property instead.

Question 23

What is DMC?

Answer 23

Donatio mortis causa which is an exceptional situation where the courts will perfect an imperfect gift. It applies to gifts made during a lifetime in contemplation of death, to take effect upon death.

Question 24

What is the criteria for a valid DMC?

Answer 24

• gift must be made in contemplation of death
• the subject matter of the gift must be delivered to the donee
• the gift must be conditional on death of the donor (Cain v Moon)

Question 25

How can the subject matter be delivered?

Answer 25

Handing over the item, or the keys to a car (Woodward v Woodward).

Question 26

Which of the following are criteria for a DMC?
A) the transferor must have completed the correct form of transfer for the property e.g. Shares or land
B) the transferor hands over the property in question or the documents evidencing ownership of it, as appropriate
C) the transferor must be terminally ill
D) none of the above

Answer 26

B

Question 27

For the exception in Strong v Bird to apply what requirements need to be satisfied?

Answer 27

• an imperfect immediate lifetime transfer
• the intention of the donor to make the transfer continues until his death AND
• the purported recipient (donee or trustee) is appointed executor of the will

Question 28

Which of the following criteria would satisfy the rule the rule in Strong v Bird? Select all that apply.
A) the appropriate forms must be filled out if the transfer involves land or shares
B) the transferor must effect delivery of the property in question in some way
C) the intention of the transferor to give the property to the trustee or donee must continue until the transferor dies
D) the trustee is appointed as the executor of the beneficiary’s estate in his will
E) the transferee (trustee or donee) is appointed as executor of the transferor’s (settlors or donors) estate

Answer 28

C and E