Certainty Of Objects Flashcards
There must be sufficient certainty of objects or else…
that trust will be void
Explain a fixed trust
A fixed trust refers to those situations in which the trust provision requires that the property be held for a fixed number of beneficiaries. Necessary to be able to draw up a complete list of beneficiaries. The trustees have no discretion as to how the property is to be split up. There is already some kind of formula in the trust.
Test for fixed trusts
It is necessary for the trustees to be able to compile a complete list of beneficiaries.
In what cases was the test for fixed trusts established?
IRC v Broadway Cottages & Lord Upjohn in Re Gulbenkian.
Trustee must be able to name each possible beneficiary or to identify all of the members of the appropriate class. If there are any objects about whom the trustee cannot be certain or if the trustee is not able to compile such a complete list, then the trust will be void for uncertainty.
What is a fiduciary mere power?
The situation in which a trustee or some other person acting in a fiduciary capacity is granted a ‘mere power’ which is not a fully fledged trust obligation but which gives the holder of the power the ability to exercise that power without any obligation to do so.
The trustee is obliged only to consider whether or not that power SHOULD be exercised. It remains open to the trustee to decide whether or not to exercise the power. The trustee is required to act responsibly. It is this responsibility that the court is able to review.
If a person has a fiduciary mere power, are they required to act responsibly?
Yes - it is this responsibility that that the court is able to review.
Re Barlow’s Will Trust
A man had died and left his will that stated that his friends and family could have any of the paintings in his collection that they want, if they paid one of two prices…
Why is this different from a discretionary or a fixed trust?
The discretion falls with the “would be” beneficiaries.
What is the test for fiduciary mere powers and discretionary trusts?
Is or is not. This means that the trustees must be able to decide whether any beneficiary is or is not within the class of objects (beneficiaries).
What is a discretionary trust?
Required that the trustees exercise their discretion and carry out their power.
What is the test for a ‘friend’?
(1) Long standing
(2) Social not professional; and
(3) When they can, they meet often.
Can a personal power be invalidated on grounds of uncertainty of objects
Re Hay’s ST - no.
Conceptual uncertainty may be cured by reference to a third party.
(1) That some 3rd person unconnected with the trust may be appointed as an expert.
(2) That the trustees may not exercise their own unfettered discretion as though 3rd parties.
Re Tuck [1978] Ch 49
- Expert
Settlor provides an income for the holder for the time being of the family baronetcy. If and when and so long as he should be of the Jewish faith, and married and living with an ‘approved wife’ or, if separated, being so separated through no fault of his. An ‘approved wife’ was defined as a wife of Jewish blood by one or both of her parents, who had been brought up in the Jewish faith, had never departed from it, and who at the date of marriage continued t worship according to the Jewish faith.
The Chief Rabbi in London was designated to decide any question as to who was an approved wife, and whether any separation was or was not due to the fault of the baronet.
Lord Denning held that a trust, which provided that money was left on trust for the benefit of such the testator’s issue who married into the Jewish faith, would be valid because the court, or the trustees was able to ask the Chief Rabbi for advice as to the extent that there was uncertainty about any postulant.
Held: Valid trust.
Which case does Re Tuck contrast with?
McPhail v Doulton - the decision in Re Tuck is in conflict with the rigor of the decision in this case.
Re Coxen [1948] Ch. 747
-Unfettered discretion as though 3rd parties.
The testator left a house to trustee upon a trust for his wife to live in; and he declared that ‘if in the opinion of my trustees shall have ceased permanently to reside therein’, the house was to fall into residue.
Q: Whether this proviso constituted a valid limitation upon the gift. Jenkins J held that the condition was not void for uncertainty; the decision of the trustees would be sufficient to determine the widow’s interest.
Held: Valid.
