Equity & Trusts: The Three Certainties

tinkerbell.441
Mind Map by tinkerbell.441, updated more than 1 year ago
tinkerbell.441
Created by tinkerbell.441 about 5 years ago
185
1

Description

An explaination of the three certaintais in terms of trusts law in the uk
Tags

Resource summary

Equity & Trusts: The Three Certainties
1 Certainty of Object
1.1 'Objects' means beneficiaries
1.2 Fixed trusts
1.2.1 E.g. £10,000 to be divided equally between my two nephews, Joe and Bill.
1.2.2 When the settlor specifies the shares of the beneficiaries.
1.2.3 E.g. My residuary estate on trust for my wife during her lifetime and then to my children in equal shares.
1.2.3.1 Called a successive interest fixed trust.
1.2.4 Rule for CoB: the list principle/class ascertainability test
1.2.4.1 Must be possible to draw up a complete list of all beneficiaries.
1.2.4.1.1 Conceptual certainty
1.2.4.1.1.1 No linguistic or semantic ambiguity
1.2.4.1.1.2 E.g. 'my friends', 'useful employees', 'good customers' aren't conceptually certain
1.2.4.1.1.3 Not capable of different interpretations
1.2.4.1.2 Evidential certainty
1.2.4.1.2.1 Should be possible to prove who the beneficiaries are.
1.3 Discretionary trusts
1.3.1 E.g. £10,000 on trust for such of my siblings in such shares as my trustees shall decide
1.3.1.1 Don't have to give something to every beneficiary
1.3.2 Old rule was the same as that for fixed trusts
1.3.2.1 List/ascertainability test
1.3.2.2 IRC v Broadway Cottages Trust
1.3.3 New test introduced in 1970s
1.3.3.1 McPhail v Doulton
1.3.3.1.1 House of Lords
1.3.3.1.2 Appropriate test is the 'Is or is not test' or 'individual ascertainability test'.
1.3.3.1.2.1 Must be able to say with certainty whether an individual is or is not in the class
1.3.3.1.2.2 Test for certainty of objects for Powers
1.3.3.1.2.2.1 Re Gestetner
1.3.3.1.2.3 Re Baden No.1
1.3.3.1.2.3.1 Lord Wilberforce: Conceptual certainty is most important factor
1.3.3.1.2.3.2 Re Baden No.2
1.3.3.1.2.3.2.1 Sachs LJ agreed with Lord Wilberforce about conceptual certainty
1.3.3.1.2.3.3 Administrative unworkability
1.3.3.1.2.3.3.1 When class of possible beneficiaries is too large for trustees to adequately survey and select from it
1.3.3.1.2.3.3.1.1 R v District Auditor ex parte West Yorkshire MC
1.3.3.1.2.3.3.2 Trust will fail
1.4 Gift with a condition precedent
1.4.1 E.g. '£100 to each of my nephews with a NUFC season ticket'
1.4.2 Viewed as a series of gifts rather than a trust.
1.4.3 Re Barlow
1.4.3.1 Correct test is 'one person test'
1.4.3.1.1 Class description must be sufficiently clear so it is possible to identify at least one person who falls within the class
1.4.3.1.2 Re Tuck is another example of the application of this test
1.5 Lack of certainty of objects creates a resulting trust of the property back to settlor
2 Certainty of Subject Matter
2.1 Property subject to the trust must be clearly defined
2.1.1 Description used to identify property must be clear and unambiguous
2.1.1.1 Shouldn't be subjective
2.1.1.1.1 Only means something to the settlor
2.1.1.1.1.1 Re Kolb's WT
2.1.1.1.1.2 Re Golay
2.1.1.1.1.2.1 'reasonable income' is sufficiently certain
2.1.1.2 Remainder provisions
2.1.1.2.1 E.g. A gift to A, and anything that is left to B'
2.1.1.2.2 Palmer v Simmonds
2.1.1.2.2.1 'The bulk' is too uncertain to create a trust
2.1.1.2.2.1.1 Not clear which part should be passed on
2.1.1.2.2.2 Resulted in an absolute gift to the husband
2.1.1.2.3 E.g. To A for life, remainder to B'
2.1.1.2.3.1 Known as a 'successive interest trust'
2.1.1.2.3.2 If drafted correctly this will create a trust
2.1.1.2.3.3 In the Estate of Last
2.1.1.3 Trusts over unallocated assets
2.1.1.3.1 Rule: subject matter must be segregated from general stock
2.1.1.3.1.1 Tangible Property
2.1.1.3.1.1.1 Re London Wine Company
2.1.1.3.1.1.1.1 No trust, wine not segregated
2.1.1.3.1.1.2 Re Goldcorp
2.1.1.3.1.2 Intangible property
2.1.1.3.1.2.1 Hunter v Moss
2.1.1.3.1.2.1.1 Involved shares in a limited company
2.1.1.3.1.2.1.2 Intangible property need not be specified as long as all items are identical
2.2 Beneficial interests in the property must be ascertainable and clear
2.2.1 'In equal shares'
2.2.1.1 Valid
2.2.1.2 Fixed trust
2.2.2 'In such shares as the trustees will decide'
2.2.2.1 Valid
2.2.2.2 Discretionary trust
2.2.3 Problems caused by other methods of ascertainment
2.2.3.1 Boyce v Boyce
2.2.3.1.1 One sister had to choose which property she wanted but died before she could do this.
2.2.3.1.2 Gift failed as court could not make the decision for her.
2.2.3.1.3 Contrast with Re Knapton
2.2.3.1.3.1 Right of selection followed order beneficiaries were named in the will
2.2.3.1.3.2 Court applied a practical solution
2.3 Effect of uncertainty of Subject Matter
2.3.1 Property would fall into residuary estate of testator OR
2.3.2 Property would be an absolute gift to first person named in clause OR
2.3.3 Property may never leave the settlors estate.
3 Certainty of Intention
3.1 Courts scrutinise the words used
3.1.1 Orally or verbally
3.1.2 Word 'trust' need not be used
3.1.2.1 Paul v Constance
3.1.2.1.1 Contrast with Jones v Lock
3.1.2.1.1.1 'Loose conversations of this sort' didn't constitute intention.
3.1.2.1.1.2 Case concerning cheque for a baby
3.1.2.1.2 'The money is as much yours as mine'
3.1.2.1.3 Milroy v Lord
3.1.2.1.3.1 Failed transfer to third party trustees
3.1.2.2 Equity looks at substance rather than form
3.1.3 Clear, unambiguous language showing a trust is intended
3.1.3.1 Precatory words are not sufficient
3.1.3.1.1 Lambe v Eames
3.1.3.1.2 E.g. I hope, I wish, I desire
3.1.3.1.3 Re Adams v Kensington Vestry
3.1.3.1.3.1 'In full confidence'
3.1.3.1.3.2 Held: Did not demonstrate intention
3.1.3.1.4 Comiskey v Bowring Hanbury
3.1.3.1.4.1 'In full confidence' were the words used
3.1.3.1.4.2 Provision went on to give additional instructions
3.1.3.1.4.2.1 Known as a 'gift over in default'
3.1.3.1.4.3 Held: A trust was intended
3.1.3.2 Increase in cases in a commercial context
3.1.3.2.1 Re Kayford
3.1.3.2.1.1 Mail order company in financial difficulty
3.1.3.2.1.2 Placed customer money deposits in 'The customers trust deposit account'
3.1.3.2.1.3 Held: Express trust created
3.1.3.2.2 Freeman v Commissioners for Customs and Excise
3.1.3.2.2.1 Restriction placed on how money is used
3.1.3.2.2.2 Express trust created in favour of transferor
3.2 Intention must be genuine
3.2.1 Midland Bank v Wyatt
3.2.2 Sham trusts not acknowledged by courts
Show full summary Hide full summary

Similar

How Parliament Makes Laws
harryloftus505
Contract Law
sherhui94
A-Level Law: Theft
amyclare96
AQA AS LAW, Unit 1, Section A, Parliamentary Law Making 1/3
Nerdbot98
A2 Law: Cases - Defence of Insanity
Jessica 'JessieB
Law Commission 1965
ria rachel
A2 Law: Special Study - Robbery
Jessica 'JessieB
The Criminal Courts
thornamelia
Omissions
ameliathorn0325
AS Law Jury Case Quiz
Fionnghuala Malone
Criminal Law
jesusreyes88