1): Express and Implied trusts Flashcards
(43 cards)
What are the types of trusts and how are they created?
Express: Intentionally created (by will or lifetime declaration)
Implied: Arise by law (resulting or constructive)
What is required for a valid inter vivos trust?
Valid declaration of trust.
Transfer of title to trustees.
What happens if a trust fails?
Inter vivos: property results back to settlor
Testamentary: intestacy applies
What is required for a valid testamentary trust?
Will must comply with s.9 Wills Act 1837 (written, signed, witnessed)
Must direct transfer to trustees
What are fixed and discretionary trusts?
Fixed: Set shares; trustee has no discretion
Discretionary: Trustee decides who benefits and by how much
What are the 3 certainties for a valid express trust?
Intention: clear from words/conduct
Subject matter: defined property and shares
Objects: identifiable beneficiaries
How is certainty of intention shown?
Words/conduct; “trust” not essential
Ambiguity = no trust
If unclear → treated as a gift, not a trust
What is required for certainty of subject matter?
Specific property identified
Shares must be clear
Tangibles need separation; intangibles do not
How is certainty of objects determined?
Fixed: complete list test
Discretionary: is/is not test (Re Baden)
Beneficiaries Must be conceptually and evidentially certain
workeable
What are the two additional requirements for a valid trust (beyond the three certainties)?
Beneficiary Principle:
Private trust must benefit individuals (not non-charitable purposes).
Rule Against Perpetuities:
Contingent interest must vest within 125 years for trusts post-6 April 2010 (Perpetuities and Accumulations Act 2009).
What formalities apply to creating trusts?
Testamentary: s.9 Wills Act 1837
Land: s.53(1)(b) LPA – must be in signed writing
Assigning existing trust interest: s.53(1)(c) LPA
What is constitution of a trust?
Transfer of title to trustees
Equity will not assist volunteer.
Equity will not perfect an imperfect gift.
What are the 3 valid ways to transfer property to constitute a trust?
Outright gift
Transfer to trustee
Self-declaration of trust
How is legal title to land transferred under a trust?
Under s.52, LPA 1925: requires a deed of conveyance.
For registered land: transfer completes upon registration at Land Registry (s.27, Land Registration Act 2002).
How is legal title to shares in a private company transferred?
Traditionally via:
Executing a share transfer form,
Handing over the share certificate,
Registering new owner in company’s shareholder register.
Transfer completes upon registration.
How is title to chattels transferred?
Either by deed of gift or physical delivery with intent to transfer.
Includes parting with control (e.g. handing over keys to car/safe/jewellery box).
How is an existing equitable interest transferred?
must be in writing and signed by assignor or their agent.
What are the exceptions to the rule “equity will not assist a volunteer”?
Every effort rule (Re Rose)
Unconscionability (Pennington v Waine)
Fortuitous vesting (Strong v Bird)
What is Fortuitous Vesting (Strong v Bird)?
If transferee fails to gain legal title but is later made executor of the estate, equity may perfect the transfer if there was a continuing intention to gift during life.
What is a fixed interest trust?
Beneficiaries’ interest is fixed by the settlor.
What is a vested interest in a trust?
Beneficiary has a present, unconditional right.
Passes to their estate on death.
What is a contingent interest in a trust?
Interest is conditional.
If the condition fails, interest reverts to settlor.
What does the rule in Saunders v Vautier allow?
Beneficiaries may end a trust and claim the trust property if:
Entitled to the trust property;
Agree to end the trust;
All are adults (18+) with legal capacity.
What are the limitations of the Saunders v Vautier rule?
Cannot be used to force trustees to act against investment instructions.
All beneficiaries must consent; if any are minors or lack capacity, the rule doesn’t apply.
