Certainty of Objects

Mind Map by , created over 6 years ago

(Equity and Trusts) Mind Map on Certainty of Objects, created by scott.james.smit on 04/16/2013.

Created by scott.james.smit over 6 years ago
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Certainty of Objects
1 beneficiary is not identified and person receives property knowing that they're intended to be the trustee
1.1 person is then said to be holding P on trust for the S (resulting trust)
2 Bare Trust
2.1 this is a trust in which the T holds on trust for one B absolutely
2.2 identity of B MUST be discernible
3 Fixed Trust
3.1 fixed group of B
3.2 Must comply with 'list certainty' rule- IRC v Broadway Cottages
3.3 if an identified B cannot be found, then his share can be distributed among other Bs- Re Benjamin
3.3.1 court ask for Bs to be willing to refund property if the need arises
4 Discretionary Trust
4.1 A trust in which T is obliged to make a distribution of P to any persons from a specified general class of B
4.1.1 imposes a duty on T to distribute, although T still retains discretion as to who shall benefit
4.1.2 example of problem: 'good friends' test set out in McPhail v Doulton: any given postulant test Requires that it be possible to say of any given C from the trust that the person 'is or is not' within the class of b. Any given postulant test Re Gulbenkian's Settlement Trust Re Baden No.2 in result that any on person cannot be categorised as falling either within or without the class, the trust will fail IRC v Broadway Cottages (list certainty)
4.1.3 Re Gestner Settlement
5 Mere Fiduciary Power
5.1 power given to T which enables them to act if they choose to do so, but which does not oblige them to act at all.
5.2 Re Hay's Settlement Trusts: T must be able to justify any decisions they make and cannot act capriciously in the decision they make
6 Personal Power
6.1 power given to a person who is not a T to decide in their absolute discretion how to deal with trust property
6.2 important that power is given to its holder in a private capacity as this power cannot be void for uncertainty
6.3 Holder of this power is able to act capriciously and entirely without any of the responsibilities usually associated with trusteeship
6.3.1 because holder of power is not a fiduciary
7 Administrative unworkability
7.1 arises in cases where the words of T are unclear
7.1.1 'definition of B is so hopelessly wide as to not form anything like a class' McPhail v Doulton
7.1.2 in this case, T said to be administratively unworkable because it is impossible for T to exercise their discretion in any proper way
7.2 applies only to fixed trusts and discretionary trust powers, not mere powers
8 Capriciousness
8.1 May be held to invalidate mere powers and discretionary trust powers
8.2 where terms of a power negate any sensible intention on the part of a settlor: e.g. all residents of Greater London. R v District Auditors ex parte...
9 Trust document solutions
9.1 1) provide for an expert to resolve matters of uncertainty
9.2 2) Give T power to resolve uncertainty on their own (Re Leek)
9.3 3) Ensure T deed contains a Cotman v Brougham Clause so that failure for one part of the trust due to uncertainty does not invalidate whole trust
9.4 4) Ensure that deed provides an express 'git over' in event that part of the trust fails for uncertainty

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