4) The Three Certainties (4.4 so far)

Question 1

Trustees of discretionary trusts must…

Answer 1

• Exercise their discretion
• Obligation to consider range of possible beneficiaries.
• Do not need to identify but must carry out a survey of the class.
• Extent depend on breadth of class

Question 2

The is / is not test

Answer 2

• No need for the trustees of a discretionary trust to draw up a complete list of obkects.
• Just need to satisfy the is/is not test

McPhail v Doulton

Question 3

Conceptual certainty

Discretionary trusts

Answer 3

• If the objects of the trust are not clearly defined.
• Trustees will not be able to apply is / is not test with certainty.

Question 4

If objects of the trust are not clearly defined

Answer 4

Trustees will not be able to apply the is/is not test with certainty
* Trustees will therefore not be able to properly survey the class and know the scope of their powers or duties
* Potential claimants will not know if they can compel administration.
* Cannot tell if breach of trusts

Question 5

Employees

Applying the is / is not test

Answer 5

= a legal meaning
* Conceptually certain.
* Clearly specify whether it applied only to current employees or past / future employees

Question 6

Children

Applying the is / is not test

Answer 6

• Children has a legal meaning so is conceptually certain.
• Check against personal intention.
• Adopted children are legally children.
• Step children are not legally children.

Question 7

Friends

Applying the is / is not test

Answer 7

How do you define?
What are the hallmarks of friendship?
Universal?

Question 8

Relatives?

Answer 8

• Conceptually certain.
• Descendants from a common anscestor.

Re Baden Deeds Trusts (No2)

Question 9

Sachs LJ in Baden No 2

Answer 9

• Law on evidential certainty for discretionary trusts
• Claimant to prove to the trustees’ satisfaction that they are within the class.
• If they cannot prove - then they are outside of it.