Flashcards
Secret Trusts.
Cards in this deck (29)
- 1Why did Secret Trusts occur?There was an issue with wills in that they were available on public record, which caused an awkward situation for those who wished to keep certain relationships private. As a result, people attempted to find ways around the Succession Act. The issue of course is whether a trust can be upheld in avoidance of the Act.
- 2What exactly is a Secret Trust?It is a purported testamentary disposition that is either declared or declared in part. A secret trust looks like gift to X, but in fact it is intended that X hold it on trust for Y.
- 3Fraud Theory tells us that...Equity will not allow a T or a secret trustee to deny the existence of a trust because of statutory guidelines. Hence Equity's maxim: "Equity will not permit statute to be used as an instrument of fraud". As per McCormack, this also means that a trustee cannot defraud a T and keep the property for himself.
- 4Meager says that:It has been suggested that the somewhat esoteric subject of Secret Trusts is as common in equity examinations as they are rare in practice.
- 5Are they reliable?There is a common conception that they are not. And the relative paucity of case law on the subject may also suggest to you that they are little used. However, in theory they do have a future some would say, Meager says that after surveying on the matter, it is discovered that many practitioners still do believe there are justifications for the use of Secret trusts, And I happen to agree with that.
- 6Fully Secret?In fully secret, it is potentially easier to commit a fraud and just keep the money. A fully secret trust occurs where nothing on the face of the Will tells you it is there.
- 7McCormack v BroganExample of fully secret. HL said that even if a trust does not appear on the face of a Will, a s.t could still be upheld if not in accordance with the Act. However here he left it up to the good judgement of his friend G. No binding obligation on the conscience.
- 8Ottaway v NormanIt is now clear that a secret trust will be upheld without the need for deceit by the trustee in making the promise. Essential point being to preclude the trustee from reneging on the promise.
- 9Semi Secret?Included trust on the face but does not include its terms. Possibility of fraud largely overcome because clear intention of the gift. On the other hand it is not private and would give rise to Q's.
- 10Blackwell v BlackwellSumner argued that there was no breach of formal requirements of a will. Said that b/c trust is not created by a will and a secret trust is created by T while still alive, making it an intervivos declaration. This is the basis for the Dehors the Will theory. However, criticism is that if it is valid upon death then is it not still testamentary disposition.
- 11Re YoungChauffeur to get 2000 but he witnessed the creation of the Will and you would assume he would not benefit. However the dehors the will theory made it valid. Considered an intervivos declaration.
- 12In both secret and half secret...issue that not compliant with the Succesion Act. Generally, equity won't allow you to use statute as an instrument of fraud.
- 13David HodgeRefuted the main alternative given my Maudsley and Hanbury that secret and semi secret trusts are valid not withstanding the Wills Act.
- 14L.A SheridanThe fully secret and half secret trusts juridically have nothing in common. Yet in the world of fact they have practically everything in common.
- 15Dehors the WillSection 9 of the Wills Act 1837 says that for a will to be valid it must be in writing signed by the testator and attested by 2 witnesses. Prima facie unsurprising that secrets trusts have been seen as infringing upon that. Dehors the Will being the most prevalent modern justification for it.
- 16CritchelySays that at first sight it does not work. Says the crucial Q cannot simply be whether the trust is enshrined in what the testator intends. She argues that it is a testamentary disposition so that the theory has been negligently confused the idea of outside the will and outside the wills act.
- 17Common Law says trusts are irrevocable?If wills are revocable and trusts are irrevocable, then how come even if dehors the will a secret trust is still revocable?
- 18incorporation by reference championed byMatthews.
- 19Matthews says thathalf secret trusts are in fact, despite their superficial similarity to fully secret trusts, governed by an entirely separate doctrine. Called incorporation by reference. This permits part of a testamentary disposition to be expressed in a document which does not comply with the testamentary formal requirements.
- 20Requirements:1) EXPRESSED IN WRITING
2)DOCUMENT BE IN EXISTENCE AT THE DATE OF EXECUTION OF THE WILL
3)MUST REFER TO THE DOCUMENT AS BEING ONE THAT IS IN EXISTENCE
4)MUST BE REFERRED TO IN A WAY THAT IS CLEARLY ASCERTAINED. - 21If beneficiaries witness the will?Re Colin Cooper: half secret left 5000 and it was expressed through communication. Another 5000 added and not communicated so it went back into the residue of the estate.
- 22Re FleetwoodDeclined to follow that Cooper decision. Saying trust must fail as it would have if the trust was declared in the will. However, Re Young is usually accepted.
- 23Elements of communicationInention to create a trust
AG chamberling an re spencers will.
communication of intention. e.g. sealed envelope to be opened on death. Re Keen and Re Boyce. - 24McCormack v BroganT made a will and left all property to his friend G and T subsequently died of collera. He said that he did not intend for him to follow instructions strictly, he left it up to his own good judgement. Do what he thinks he would do. P on list he was an illegitimate child. HL said even though not on face of the will it still counted. Hw not at issue here because it was not imperative. Not using a statute for fraud is the theoretical underpinning of ST but is subject to considerable criticism.
- 25Blackwell v Blackwell1/2 secret trust. T made will left property on trust for the person or persons indicated by me to them, Was for extra martial lover and child. Gift upheld and judgement given by Sumner dehors the will.
- 26Wallgrave v TebbsT left property to his friends but he failed to tell them that while still alive they were to hold it on a charitable religious purposed. They were informed after death and did want to follow through but actually could not because they were not bound to it.
- 27Re KeenT stated that the trustees were to hold certain property on trust for such persons as may be notified by me to them during my lifetime. 1 month before making will T had given trustees a sealed envelope not to be opened until after death? is that sufficient communication? Court said ship sailing under sealed orders is still sailing. H/w here what he said would do and what he actually did were inconsistent so could not be upheld.
- 28Prendiville v PrendivilleT left entire estate to his wife for life to be used by her according to my wishes as she has been advised. Wife created declaration that she accepted wishes and named them but were different to his. Then made her own will and wishes varied again. Widow died without complying with any wishes. Barron J said no diff bw secret and half secret so long as there is communication prior to the testators death.
- 29In IrelandPrendville usually precedent.
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- Flashcards on Secret Trusts., created by d.hanlon3 on 30/04/2015.
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