Flashcards
(2) Creating Express Private Trusts
Cards in this deck (88)
- 1To create a valid express trust...- must satisfy the three certainties
- must satisfy any formalities
- trust must not offend the perpetuity rule
- property needs to be vested properly in the trustee - 2Knight v Knight- set out the three certainties
(1) certainty of intention (words)
(2) certainty of subject matter
(3) certainty of object (beneficiaries) - 3Twinsectra v Yardley- certainty of intention
- settlor must intend the outcome, but need not appreciate that they were creating a trust - 4Re Kayford- certainty of intention
- no need for the word 'trust' to be used - 5Paul v Constance- certainty of intention
- no need for the word 'trust' to be used
- 'as much yours as mine' - 6Shah v Shah- certainty of intention
- no need for the word 'trust' to be used
- 'i am as from today holding 4,000 shares... for you' - 7Jones v Lock- certainty of intention
- 'loose conversations' will not be sufficient to satisfy certainty of intention - 8Richards v Delbridge- certainty of intention
- 'loose conversations' will not be enough to satisfy certainty of intention - 9Town Investments v Department of Environment- certainty of intention
- the word 'trust' is not necessarily sufficient in itself to indicate intention either - 10Precatory words- those that express desire/hope rather than an instruction
- 11Re Diggles- certainty of intention
- precatory words insufficient to satisfy certainty of intention
- 'it is my desire that' - 12Re Hamilton- certainty of intention
- precatory words insufficient to satisfy certainty of intention
- 'i'll wish that' - 13Re Adams- certainty of intention
- the whole documents and the circumstances must be considered when establishing certainty of intention - 14Comiskey v Bowring-Hanbury- certainty of intention
- stated precatory words of 'in full confidence' but went on to give a mandatory direction
- satisfied certainty of intention - 15Re Steele's WT- certainty of intention
- Words not otherwise sufficient to create a trust, however the trust was written specifically using old precedent - 16Shelley v Shelley- certainty of intention
- Words used not otherwise sufficient to create a trust, however the trust was written specifically using old precedent
- was sufficient to satisfy certainty of intention - 17Lambe v Evans- property had been transferred to the settlor's widow however certainty of intention was not sufficient and the trust failed
- property remained with the widow - 18Jones v Lock- If property hasn't yet transferred but the trust fails on certainty of intention, the trust property remains with the owner
- cheque remained part of the father's estate
- was meant to be a gift but failed as title had not passed --> held: would not be treated as a declaration of trust as was not J's intention - 19Palmer v Simmonds- certainty of subject matter
- uncertain description
- 'the bulk of my said residuary estate'
- if the transfer of the whole of the property with attempt to create a trust over an uncertain part, then the recipient takes absolutely - 20Strange v Barnards- certainty of subject matter
- need for certain descriptions
- 'the remaining part of what is left that he does not want of this own wants' - 21Boyce v Boyce- certainty of subject matter
- uncertain descriptions
- 'all my other houses' remaining after M had chosen one, where M predeceased the testator without making a choice
- if transfer of the whole on trust but uncertainty as to division, then the trust is held on RT for settlor - 22Re Dolay's WT- certainty of subject matter
- courts may be willing to give meaning to an imprecise definition
- 'reasonable income' could be determined objectively by reference to B's standard of living - 23Re London Wine- certainty of subject matter
- bottle for each customer had not been segregated from the bulk and therefore could not identify the property --> certainty failed - 24Re Goldcorp- certainty of subject matter
- only those customers where bullion had been segregated from bulk could establish a trust
- no segregation; no trust - 25Hunter v Moss- certainty of subject matter
- intangible property of the same time will be exactly the same in any material sense therefore you don't need to segregate/establish which is to be held on trust - 26MacJordan Construction v Brookmount- certainty of subject matter
- must have intention to create a trust from a particular bulk/fund - 27Pearson v Lehman Bros- certainty of subject matter
- co-ownership analysis --> total property held on trust - 28conceptual certainty- the definition/description of the objects
- 29evidential certainty- showing that someone is an object
- is it possible to show who the objects are? - 30ascertainability- whether a particular object can be found
- 31Re Benjamin- ascertain ability does not defeat a trust
- if lack of ascertain ability, liability can rid of their liability via a Benjamin order - 32administrative workability- is the size of the class too large for the trust to be administered?
- 33capriciousness- is there some sensible intent behind the settlor's choice of objects?
- 34Re Manisty- a trust can fail on the basis of capriciousness
- 35IRC v Cottages- adoption of the complete list test for fixed trusts
- trust initially void because it was impossible to obtain a complete list of beneficiaries
-however, the description of objects/beneficiaries was precise enough that you could determine whether an individual fell within it or not
- "void for uncertainty unless the whole range of objects eligible for selection was ascertained or capable of ascertainment" - 36Satisfying the complete list test (for fixed trusts)...- need to determine al the objects/potential objects
- need to establish if a beneficiary fits within the category or not
- need BOTH evidential and conceptual certainty - 37Re Barlow's WT- certainty of object
- 'friends' was sufficiently certain --> up to the individual to prove
- Browne-Wilkinson; it would be possible to ascertain which individuals the settlor had in mind when a trust in favour of 'friends' was created
- so, on the facts of any particular case, it may be possible for the courts to decide that it knows what a particular settlor had in mind when the trust was created, even if the words may seem ambiguous in the abstract - 38Re Gulbenkian- the 'any given postulant' test for discretionary trusts originates from here
- Denning "if the trustee can say of any particular person that he is clearly within the category then the gift is good" - 39McPhail v Doulton- certainty of object
- recognised that the trust would fail if the complete list test was applied, so used Re Gulbenkian and applied the test to discretionary trusts
- Wilberforce, "the trust is valid if it can be said with certainty that any given individual is or is not a member of the class' - 40Re Baden (No 2)- discussion of how the 'any given postulant test' should be applied
- 41R v District Auditor- 'inhabitant of West Yorkshire' was conceptually certain
- 42McPhail v Doulton- trustees must survey the range of objects/potential beneficiaries
- 43Re Coxen- trust may provide for any uncertainty to be resolved by trustees
- trustee given the role of arbiter which resolved evidential uncertainty - 44Re Tuck's ST- trust my provide for any uncertainty to be resolved by a third party
- third party could resolve evidential uncertainty, and indicated it could also settle conceptual certainty - 45Re Wright's WT- can't sever the uncertain part of the term, when a definition includes both certain and uncertain aspects
- conceptual uncertainty is one part of a definition and is fatal to the whole - 46Millroy v Lord- 'there is no equity in this court to perfect an imperfect gift'
- '... the settlor must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property"
- wrong document used therefore not everything he could have done - 47Strong v Bird- if the donor has the intention to give, and the intended donee obtains legal title through another capacity, this will perfect the gift
(1) intention to give (2) vesting of title (3) fortuitous vesting in a trustee - 48Re Freeland- strong v bird
(1) intention to give
- not sufficient to intend at some point to transfer - 49Re Innes- strong v bird
(1) intention to give
- not sufficient to intend to leave something by will - 50Re James- strong v bird
(1) intention to give
- must be a continuing intention to give
(2) fortuitous vesting in a trustee
- rule still applied even though the donee was appointed administrator instead of the executor - 51Re Wale- strong v bird
(1) intention to give
- intention to give, but then forgot and treated property as his own
- no continuing intention at death - 52Re Ralli's WT- strong v bird
(3) fortuitous vesting in a trustee
- a trust can be fully constituted where legal title vests in the trustee by another means - 53Choithram- declaration showed P's intent to create a trust
- the trust was also validly constituted at the point of P's declaration, as the legal title was also invested in P --> P was one of the trustees of the charitable foundation he wished to make a beneficiary
- used pennington as support for considering conscionability - 54Re Rose- transfer will be effective in equity (not law) if the settlor had done everything which was necessary to be done by him/her in order to transfer the property
- settlor retains legal title, but the intended donee has equitable title - 55Re Fry- Re Rose rule
- not sufficient if the settlor's input is needed further
- needed consent of the Treasury which might have required settlor to provide further information or answer questions - 56Mascall v Mascall- re rose
- property is held on trust for the beneficiary from the point of re rose taking effect, even if the settlor then changes his mind - 57Pennington v Waine- loosened the rule in re rose
- even though the settlor had not done everything in their power (form had not been sent), the gift was perfect in equity as it would be unconscionable to change her mind - 58Zeital v Kaye- explained pennington as concerning 'special facts'
- applies re rose
- may have been unconscionable, but the court focused on the steps taken
- however, creates more uncertainty? - 59Curtis v Pulbrook- court tried to explain how pennington might fit into established equitable principles --> proprietary estoppel?
- restricts judicial discretion
- attempts to bring case back with established principles
- Briggs; the rules in this area don't 'serve any clearly identifiable or rational policy objective'
- however, creates more uncertainty? - 60Sen v Headley- requirements for a DMC set out
(1) contemplating of death
- donor had been re-admitted to hospital and aware not long to live
(2) intention that the gift be perfect only upon death
(3) delivery of subject matter
- sufficient to grant means to control/obtain the property or 'essential indicia of title'
- box containing title deeds of the house which was valid delivery of essential indicia of title to the house - 61King v Dubrey(1) contemplation of death
- no need to be on 'deathbed' but must have good reason to anticipate death in the near future - 62Wilkes v Allington(1) contemplation of death
- doesn't matter if the donor then dies from different causes - 63Woodard v Woodard(3) delivery of subject matter
- need not deliver the subject matter itself
- transfer of a set of keys represented sufficient dominion over the property - 64Re Lillingstone(3) delivery of subject matter
- sufficient to grant means to control/obtain the property or 'essential indicia of title'
- gave key to a trunk which unlocked other aspects he was entitled to also - 65Cosnahan v Grice- need clear evidence of a DMC
- 66Gardner v Rowe- failure to comply with formalities means the trust is unenforceable
- ultimately, the requirement for formality outweighs the settlor's intention - 67Rochefoucauld- unconscionable for the trustee to take advantage of statute to take property beneficially
- means s.53(1)(b) effectively limited to oral self-declaration of trust son land, as if transfer to the trustee, this principle enforces the trust regardless of lack of written evidence - 68Bannister v Bannister- court enforced the trust despite the lack of formality of s.53(1)(b)
- 69Re Last'Anything that is left' of the testator's estate will be held to be sufficiently clear
- 70Re Harvard Securities- Neuberger J; stated that he was bound by Hunter v Moss
- only followed the decision insofar as he absolutely had to do so
- as long as the total and proportions of the shares were clear, this was enough
- distinction between London Wine and Hunter enough - 71Charlie Webb on Pennington- judges are given wide discretion because unconscionability of a subjective and uncertain principle
- ultimately renders the law uncertain - 72Fully secret trust- testator leaves property to a named individual, intending for L to hold on trust for the benefit of another
- the will makes no indication of the testator's intention that L should hold on trust - 73Half secret trust- testator leaves property to L in the will 'on trust', and intends l to hold on trust for the benefit of another
- the will indicates the existence of the trust, but not the beneficiary of the trust - 74Requirements for a secret trust...(1) intention to create a trust
(2) communication of the trust to the legatee
- time of communication differs between the two types of secret trusts
(3) acceptance of the trust by the legatee - 75Requirements for fully secret trusts...- communication of terms and acceptance by the legatee must occur before the testator's death
- 76Re Boyes- existence of trust communicated to and a accepted prior to the testator's death, but the beneficiaries only revealed within letters found after death
- held: failed fully secret trust
- legatee agrees to hold on trust but failure lies in incomplete communication?
- legatee holds on RT for testator's estate - 77Wallgrave v Tebbs- no trust creates because letter showing intention of trust only found after death, and no communication prior to death
- 78Re Keen- sufficient for terms to be provided in a sealed form, provided that the trustee is aware that they contain the terms of the trust and accept on this basis
ALSO, HALF TRUSTS
- communication prior to execution, but will referred to 'such persons as may be notified by me' --> no secret trust as inconsistent with the terms of the will/prior notification - 79Half secret trusts requirements...- communication of terms and acceptance must be before, or at the same time as the execution of the will
- 80Blackwell v Blackwell- communication and acceptance must be before, or at the same time as the execution of the will for half secret trusts
- prevents testator reserving the power to change the will informally - 81Re Colin Cooper- testator adds further property to trust without communicating it after acceptance by legatee?
- legatee will be trustee in relation to initial property, but take new property absolutely - 82David Hayton on Hunter v Moss- hurried decision and does not line up with the dissections between an inter vivid trust and a testamentary trust
- trust should have failed - 83Jill Martin on Hunter v Moss- decision was fair, sensible and workable
- tracing used as a mechanism for justification
- if settlor sold all/some shares in the fund, the beneficiary via the trustee could trace his entitlement into any remaining shares - 84Theresa Villers on Hunter v Moss- "the flexibility provided by Hunter v Moss may yet to prove to have deleterious (detrimental) effects"
- provides for further uncertainty and does not reflect the settlor's wishes - 85Virgo on Paul v Constance- probably the limit of how far the courts will go to find a sufficiently certain intention to create a trust
- 86Gardener on Paul v Constance- case illustrates the importance of context --> in family circumstances, where there is no legal advice, the courts may be more ready to find necessary intention
- 87Nicola Roberts on Pennington v Waine- sets a very low detrimental reliance threshold
- there is no rule which requires detrimental reliance to be substantial, however such a low threshold will allow claimants to succeed in a broad range of circumstances - 88Dennis Klinck on Pennington v Waine- unconscionability merely represents "a normative standard for evaluating conduct; without more, it simply cannot be helpful. For this reason, such flexibility translates into uncertainty and should not be tolerated"
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- Trusts Flashcards on (2) Creating Express Private Trusts, created by Kirsty Lowless on 06/05/2019.
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