Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

SQE 1 > Equity & Trust > Flashcards

Equity & Trust Flashcards

1
Q

What is the rule in saunders v vautier?

A

sole adult beneficiary can bring the trust to an end if they have a vested, in possession and absolute interest
With multiple beneficiaries, they can close the trust if all the beneficiaries under the trust who could possibly become entitled
- are in existence and ascertained
- are 18 or older and of sound mind
- are in agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the requirements for making a valid gift?

A

Three Certainties
- intention (words should not be precatory)
- subject matter (property must be clearly defined, property must be identifiable (able to segregate property)
- objects (persons)

Correct formalities for the transfer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the formalities of transfer of land?

A

Deed
- stated to be a deed
- signed and witnessed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the formalities of transfer of shares?

A

Shares in private companies will be outside the CREST system so
- Transferor signs the stock transfer form
- transferor hand completed stock transfer form and share certificate to transferee or company
- transferee sends both to the company to be registered

Shares outside the CREST system (where a broker holds the shares)
- transfers are recorded electronically

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

How may chattels be transferred?

A

By actual delivery (unless physcial delivery is not practicable) or by deed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How may chattels be transferred?

A

By actual delivery (unless physical delivery is not practicable) or by deed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How to make a trust with self as trustee?

A
  • Make a declaration of self as trustee ( trusts over land must be evidenced in written document signed by the person and include all terms of the trust, otherwise can be made orally)
  • identify the trust property
  • identify the beneficiary
  • three certainties
  • no transfer needed as legal title is already vested
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

How to create a trust with a third party as trustee?

A
  • Declaration
  • Three certainties
  • Beneficiary principle
  • Satisfy the rules against perpetuity
    *Rule against the remoteness of vesting
    *Rule against alienability

Transfer the property to the trustee

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

If a gift or trust is imperfect, how can it be saved?

A

Unconscionable test
Every Effort Test
Strong v Bird

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is the unconsionable test?

A

When the donor has reached a stage of the transfer that it would be unconscionable for the gift not to be made. Person was made aware of the gift and there was have acted to their detriment in the reliance on this gift

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is the every effort test?

A
  • done everything LEGALLY required of him to transfer the property
  • effectively relinquished control/ put the property beyond his recall
  • Donee has within their control everything to need to complete title
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the strong v bird exception?

A
  • donor intends to make an immediate gift to the donee but the gift is invalid because he fails the formalities
  • intention must be to make an immediate gift or trust
  • intention to continue unchanged until the donors death
  • donor dies and donee is appointed administrator or executor
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is the certainty of objects test for fixed trust?

A

Complete List Test
- conceptual certainty
- evidential certainty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is the certainty of objects test for discretionary trust?

A

Given Postulant test
- test requires a trustee to say with certainty whether any given individual is or is not a member of a class
- *term relatives is sufficiently certain
- evidential certainty (it is on the person in the class the prove they qualify)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What do you need for a charitable purpose trust?

A
  • be for a charitable purpose
    *Relief of poverty
    *advancement of education
    *advancement of religion
    *arts culture science
    *environmental protection
    *animal welfare
  • satisfy a public benefit test
  • be wholly and exclusively charitable
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Can a trust succeed as a non-charitable purpose trust?

A

Perpetuity period: must be limited to 21 years and must be able to use all the capital on the purpose

17
Q

When is a resulting trust made?

A
  • Presumption of Voluntary transfer of property is a resulting trust (can be rebutted)
  • Contribution to the Purchase money (not to legal fees or stamp duty but the price of the property)
  • Presumption of advancement (gift)
    *applies husband to wife (not wife to husband)
    *father to child
    *no presumption between unmarried partners
18
Q

How can a presumption for a resulting trust be rebutted?

A
  • evidence the gift or loan was intended
  • evidence they intended to retain some power over the property would indicate a resulting trust
  • evidence must only be from acts or statements done at the time of the purchase
19
Q

Constructive trusts of the family home where legal ownership is in both names?

A

May be an express declaration of trust which may be evidenced in writing
Where not expressly stated the general rule is a couple will be presumed joint tenants in equity and so have 50/50 beneficial interests
*this can be rebutted if it can be shown that parties had different common intention at outset or this common intention changed over time

20
Q

Constructive trust of family home where only one person is the legal owner?

A

Presumption that legal owner owns the whole equitable interest unless there is an express declaration that the legal owner holds on trust for another.
Can be rebutted if claimant can show
- common intention
*express
*inferred from conduct (contribution to household expenses usually not enough, contribution to mortgage may saitsify)
*claimant acted to their detriment

21
Q

What are the requirements to establish proprietary estoppel?

A
  • assurance made the claimant
  • reliance by the claimant on the assurance
  • detriment to the claimant in reliance on the assurance
  • it would be unconscionable to give the land back
22
Q

How to establish recipient liability?

A
  • trustee transfers trust property to stranger in breach of trust
  • stranger transferred property for the strangers own benefit
  • stranger received the property with the requisite knowledge the transfer was a breach of trust
    *not allowed to wilfully shut your eyes
    *should the person have drawn an inference

*can bring a proprietary claim

23
Q

How to establish accessory liability?

A

Dishonestly assists a breach of trust or fiduciary duty
- needs active assistance
- Standard of dishonesty is objective
* they would be personally liable

24
Q

When are trustees liable for breaches of trust?

A

Always liable for breaches committed during their time as trustee even after they retire.
Will be liable after they retire for further breaches if the retirement facilitated the breach.
Cannot be liable for breach prior to becoming a trustee

25
Q

Can trustee liability be excluded in the trust instrument?

A

If there is an exemption clause, trustees can be protected from liability unless the breach is fraudulent.
S61 also protects trustees if the court thinks they acted honestly and reasonably and ought fairly to be excused from the breach

26
Q

What is the limitation period for bringing a breach of trust claim?

A

Six years from the breach (only starts with beneficiaries with vested possession)

27
Q

Is a trustee exempt from liability if they have fully informed consent from the other beneficiaries?

A

Yes

28
Q

What are the tracing rules when a wrongdoer acquires breached funds?

A

??

29
Q

Can trustees purchase trust property?

A

No conflict rule: trustee purchases trust property from himself and co-trustees (NOT ALLOWED, even if fair price has been paid). Sale is voidable by the beneficiaries within reasonable time

30
Q

Can trustees purchase a beneficiary’s equitable interest?

A

Fair dealing rule: its ok as long as you can show the transaction was fair and honest and beneficiary was not under undue influence

31
Q

When does the power of maintenance arise?

A
  • beneficiary must be a minor and not aboslutely entitled to the income
  • ## only applies to beneficiaries with income interest
32
Q

WHen does the power of advancement arise?

A
  • discretion to advance all of the beneficiary’s share
  • only applicable to beneficiaries entitled to trust capital and cannot apply to discretionary trust
  • need consent of other beneficiary
33
Q

Who can appoint a new trustee?

A

Any remaining trustees
Beneficiaries (saunders v vautier rule: must be exercised in writing)
Court appointment (though cannot appoint if beneficiaries disagree on the appointment of trustee

34
Q

How can a trustee retire?

A

Voluntary retirement as long as there are two trustees remaining
Forced by the beneficiaries (saunders v vautier)

SQE 1 (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions