TRUSTS & POWERS

TRUSTS & POWERS

1. TRUST - Obliges a person to do something

2. Power - Enables a trustee to do something

3. Exhaustive trusts must be exhausted within a specified time

4. Non exhaustive - Trustees can consider whether or not to exercise their discretion

5. Beneficiaries cannot compel trustees to exercise their discretion

6. Trustees can be compelled to exercise their obligations

7. McPHAIL v DOULTON - Raised 2 questions

   • Was this a power or discretionary trust?
     • Was it void for uncertainty of objects?
       • Applied the test from RE GULBENKIAN - Is it possible to say, with certainty, whether someone is or is not a member of the class?
         • Conceptual Uncertainty - Words must sufficiently define the class which the settlor intends to benefit
           • Evidential Uncertainty - on a matter of evidence can specific persons prove that they are members of that class?

8. RE HAYS SETTLEMENT TRUSTS

   • Hybrid power and discretionary trust to distribute to anyone but settlor and her spouse, power effective but not trust as administratively unworkable
   • Discretionary trust - trustee must survey the class before deciding on distribution
     • Apply for Benjamin order if one of the beneficiaries is missing
       • Discretionary trust will not fail simply because it cannot ascertain every member of class
         • RE BADEN'S DEED TRUST (NO2) Person must be able to prove that they are in the class, but discretion still lies with trustee
           • Width of the class may cause discretionary trust to fail even if class is conceptually certain
             • A power is unlikely to fail for administrative unworkability
               • RE MANISTY'S SETTLEMENT - Power cannot be void for number of people involved only, only if terms are capricious (show no sensible intention)
                 • R v DISTRICT AUDITOR - administratively unworkable but conceptually certain. Not a valid trust as class was 2.5 million so too wide.

9. Conditions subsequent and precedent

   • RE ALLEN - son had to be a practicing member of CofE when father died, he benefitted
     • Subsequent - Must indicate what would constitute the occurence of the condition subsequent